ABG Employment Newsletter – March 2016

EAT confirms Working Time Regulations can be interpreted to include results-based commission in statutory holiday pay

The Employment Appeal Tribunal (EAT) has dismissed British Gas’s appeal against an Employment Tribunal’s decision and has upheld the original decision that results-based commission should be included in statutory holiday pay derived from the Working Time Directive.

The decision does not provide any further clarity on the practical question of what is an appropriate reference period for averaging pay. Pending a definitive ruling by the Court of Appeal, uncertainty remains about how to deal with claims for underpaid holiday and how to calculate holiday pay going forward. However, it is worth remembering that any claims brought on or after 1st July 2015 are limited to deductions where the relevant date for payment fell within two years before the presentation of the claim. (British Gas Trading Ltd v Lock and another UKEAT/0189/15.

Summary dismissal for disclosure of confidential information was wrongful and unfair where employer had culture of information-sharing

An Employment Tribunal has held that a bank wrongly and unfairly dismissed a foreign exchange trader for disclosure of confidential client information to traders from different banks in an online chat room. The tribunal found that it was insufficient for the bank to rely on a strict reading of its policies and codes of practice on protecting confidential information without properly investigating how the policies were actually applied in the foreign exchange business or the extent to which the information was already in the public domain. A reasonable investigation would have revealed that there was a culture of information-sharing between foreign exchange traders at different banks, a fact that was highlighted by a regulatory investigation into the bank by the FCA. The inadequacy of the bank’s investigation was compounded by its failure to address the relevance of the regulatory investigation for the disciplinary process or to interview witnesses who might have corroborated the trader’s defence. The tribunal also found that the trader was not in repudiatory breach of contract. The breach of confidentiality was not deliberate as he believed his conduct was permitted, given the similar conduct of his peers and immediate managers. Further, at the time of the dismissal, he had not shared confidential information in chat rooms for three years following a specific management instruction on the use of chat rooms.

The case provides useful lessons for employers conducting disciplinary investigations and hearings for misconduct, particularly in regulated sectors where the consequences of summary dismissal on an employee’s future career prospects can be severe. (Stimpson v Citibank N.A. ET/3200437/15.)

Proposed increase of National Minimum Wage for workers aged over 25

From April 2016 the Government has introduced a fifth category of worker to whom the national living wage will apply, namely those aged 25 or over. The Government will set the first premium at 50p which effectively will result in a higher national minimum wage of £7.20 per hour (instead of £6.70).

The comments in this note are of a general nature only. Full advice should be sought on any specific problems or issues.

Christopher Gigg cgigg@abg-law.com  +44 (0)115 934 3308

Kathryn Meir kmeir@abg-law.com +44 (0)115 9343310