Employment Law Bulletin June 2014

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This bulletin covers a couple of significant judgments which have been handed down recently, a couple of interesting cases and a forewarning of the major change in parental leave.

1.       In the case of Lock v. British Gas Plc, the European Court of Justice considered how holiday pay due under the Working Time Regulations should be calculated for an employee who earns commission, typically on sales achieved. This would be particularly relevant to salesmen, brokers and estate agents.

The ECJ has held that in such circumstances, holiday pay must include an element to reflect such commission. This is the case even though the Employee is not working on the prospective sale whilst on holiday. The rationale for this is that if the Employee was only in receipt of basic pay he would be discouraged from taking holiday and the purpose of the Working Time Regulations is to encourage the taking of holiday.

The ECJ was invited to state how they thought an Employer should calculate the additional holiday pay entitlement. They declined to do so saying that it was a matter for individual national governments.

This is an issue of considerable concern and will need to be addressed. The judgment states what the law has always been since the introduction of the Working Time Regulations in 1998. Employers who only pay basic pay during holidays face the prospect of substantial claims from a number of Employees to make good this shortfall.

Looking forward, Employers may wish to consider introducing holiday pay including commission but calculated over an extended period and to restrict holidays for such staff to short individual periods of time, thus minimising the problem.

2.       Bates van Winkelhof v. Clyde and Co LLP. In this case, in the Supreme Court ruled that a Member of a limited liability partnership was a “Worker” for the purposes of employment protection. A Worker does not enjoy the same protection as an Employee. In particular, a Worker does not have any entitlement to bring a claim for unfair dismissal.

In the Bates case, the issue was whether a Member of an LLP had the protection given to Workers with respect to whistleblowing. The Supreme Court held that she did. Most LLPs would not prevent a member from making a protected disclosure but it should be noted that where a Member has made a protected disclosure he/she should not be treated to his/her detriment as a result of this. If they are, then they have a claim against the LLP for compensation.

Furthermore, Workers have additional rights under the Working Time Regulations and qualify for auto-enrolment for pension purposes.

3. Constructive Dismissal

Constructive dismissal arises where an Employee resigns in response to a repudiatory breach of contract by the Employer. It is important that the resignation is in response to the breach and is not delayed. It is clear that an Employee who works out his notice of resignation will not have a problem but in the case of Cockram v. Air Products Plc, the Employee resigned in what he said was in response to a repudiatory breach by the Employer but gave a longer notice of resignation than he was required to under his contract. A subsequent claim for constrictive unfair dismissal failed because the Tribunal held that in agreeing a longer period of notice, the Employee had waived the breach by the Employer so could no longer rely upon it.

4. Discrimination

At first glance, the case of Metropolitan Police v. Keohane is the type of matter which Employment lawyers are often embarrassed about, however, on examination, it does raise a genuine issue. Mrs Keohane was a police dog handler. A police dog called Numki Pippin was her permanent responsibility staying with her when she was not at work. When she became pregnant the Metropolitan Police removed the dog from her care. This was standard policy on health and safety grounds. She brought a claim for sex discrimination. The issue was not that the removal itself was a detriment, but that such removal had a prejudicial effect upon her career progression, which was accepted by the employer. As the removal arose as a result of her pregnancy, the prejudicial effect was connected to the pregnancy and therefore sex discrimination.

5. Parental Leave

For children born or expected to be born after the 5 April 2015 new rights of shared parental leave will apply. These entitle the mother and father (or partner of the mother) to share what currently is the mother’s maternity leave. This is subject to qualifying periods of employment and appropriate notification. Much of the detail rests within regulations which are yet to be finalised. It is anticipated that these will be ready over the course of the summer and we intend to hold a workshop to discuss this in September.

Note however that the regulations actually take effect from 1 October 2014 and from that date the father of the child will have the right to take unpaid leave to attend up to 2 antenatal appointments.

If you are interested in attending the proposed workshop on this important subject please contact; beccie.raven@twmsolicitors.com