Update on holiday pay calculation and commission
On 25th March 2015 the Leicester Employment Tribunal handed down its Judgment in the remitted case of Lock -v- British Gas on the issue of including commission payments in the calculation of holiday pay for workers (including salaried staff).
The Leicester Employment Tribunal decided it was necessary to add words into the Working Time Regulations 1998 (WTR 1998) to give effect to the European Working Time Directive. In particular, the weeks’ pay provisions of the Employment Rights Act 1996 should be rewritten for the purposes of the WTR so that “commission and similar payments” are included for the purpose of calculating holiday pay. This follows the Bear Scotland case decided last year by the Employment Appeal Tribunal and discussed in our January Employment Newsletter (https://abg-law.com/abg-employment-newsletter-august-2014-2/).
The effect of this case is that the Tribunal held there is no obstacle in interpreting the WTR so as to include commission payments in the calculation of holiday pay in respect of the four weeks’ annual leave provided by Regulation 13 WTR, by looking at the previous 12 weeks’ pay before the holiday is taken. This does not have to be included when calculating the additional 8 days’ holiday pay added by Regulation 13A of WTR to cover bank holidays introduced by the UK Government.
In the interim, if you have any specific queries, please contact a member of our Employment Group.
Duty to make reasonable adjustments not triggered if employee is unfit to return to work
In a recent case, the Employment Appeal Tribunal (‘EAT’) upheld a decision by the Employment Tribunal that an employer’s duty to make reasonable adjustments was not triggered due to the fact that the employee had given no indication that she would be fit to return to work.
Under the Equality Act 2010, where an employer’s provision, criterion or practice puts a disabled employee at a substantial disadvantage compared to non-disabled employees the employer must take such steps as are reasonable to avoid the disadvantage.
In this recent case the employee went off sick due to stress. She provided a medical certificate and asked about part time hours in the future. A month later she provided a further medical certificate but did not mention part time working. Two weeks’ later the employer met with the employee and offered her slightly different work and a four week phased return on part time hours. The employee stated that she would discuss the offer with her doctor. The employee did not discuss the issue with her employer again. Three months later, the employer gave the employee notice of dismissal in line with its attendance policy due to the fact that there was no indication of return within six months. The employee brought various claims, including that her employer had failed to make reasonable adjustments.
The Employment Tribunal held that, although the employer’s absence policy did put disabled employees at a disadvantage, in this case, the employer’s duty to make reasonable adjustments had not been triggered as the employee had given her employer no indication that she would be returning to work at any particular time. The employee appealed.
The EAT dismissed the appeal. The EAT found that the Employment Tribunal were correct in finding that it had been up to the employee to approach her employer and raise the issue of adjustments that could be made to allow her to return to work. As far as the employer was aware, the employee had not become fit to work even if reasonable adjustments were made.
This case found that for the duty to make reasonable adjustments to be triggered there must be at least some prospect of the employee becoming fit to work. However, it should be noted that this case was decided under the Disability Discrimination Act 1995 and not the Equality Act 2010. Under the Equality Act 2010, the employee would also have been able to bring a claim for discrimination arising from disability, as well as a failure to make reasonable adjustments claim.
Employee of British company working abroad was protected from Unfair Dismissal
In a recent case, the EAT held that an employee of a British company who was working remotely in Australia was protected by the Employment Rights Act 1996 and could bring a claim for unfair dismissal in the English Employment Tribunal.
In this case, the employee who was an Australian citizen worked for a British Company and was based in London. Her employment contract was governed by the law of England and Wales. A few months after her appointment, the employee moved back to Australia due to family illness. She kept her job and worked remotely for several years. The employee then resigned and brought a claim for constructive unfair dismissal and whistleblowing in the English Employment Tribunal.
At first instance the Employment Judge held that the Tribunal did not have the jurisdiction to hear the claim. The Judge held that, although there was a strong connection to England, the fact that the employee had chosen to move to Australia rather than being sent there by her employer meant that she did not have the right to bring a claim in the English Employment Tribunal. The employee appealed.
The EAT upheld the appeal and ruled that the Employment Tribunal did have the jurisdiction to hear the claims. The employee worked for a British company and all of the work she did was for the benefit of the employer’s London office. The fact that she worked remotely in Australia for family reasons did not, for Employment Rights Act 1996 purposes, differentiate her from an employee who was posted abroad by their UK based employer. This was also supported by the fact that the employee had previously brought a grievance which was handled in London with reference to the employer’s Staff Handbook.
This case highlights that where an employee is working remotely, regardless of the reason, providing there is sufficient connection to a UK company; they may be protected by the Employments Right Act 1996. However, it is important to remember that each case will be decided on its own facts.
The comments in this note are of a general nature only. Full advice should be sought on any specific problems or issues.