ABG Employment Newsletter – February 2015

Compensation limits and minimum awards to increase

For claims where the ‘appropriate date’ for the cause of action (for example, in unfair dismissal claims this would be the date of termination) is on or after 6^th April 2015 the compensation limits and statutory awards have been increased in relation to certain employment claims.

Below is a summary of the main changes:-

The maximum compensatory award for unfair dismissal will rise from £76,574 to £78,335.
The maximum amount of a week’s pay, used to calculate redundancy payments or various awards including the basic or additional award of compensation for unfair dismissal, will rise from £464 to £475.
The minimum basic award for certain unfair dismissals will rise from £5,676 to £5,807; this will affect dismissal awards for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative.

Deductions for cost of training to be ignored when calculating National Minimum Wage

In a recent case, the EAT held that a deduction from a final salary payment to cover the cost of a training course should be ignored for the purpose of calculating whether an employee had received NMW.

In this case, an employee signed an agreement to repay her employer, by way of deductions from her final salary, part of the cost of her training course in the event that she left within two years of undertaking the course.

The employee then resigned within the two year period and her employee deducted the cost of the training course from her final salary. The HMRC then issued a notice of underpayment to the employer as it appeared that the employee had not received NMW in her final salary. The employer appealed.

The Employment Tribunal held that the deductions should have been disregarded for the purposes of calculating NMW as the National Minimum Wage Regulations set out that certain deductions that relate to the “conduct of the worker, or any other event, in respect of which he….is contractually liable” should be ignored for the purpose of calculating NMW. The employee had signed an agreement stating that she would repay part of the cost of her training if she left within two years and she was therefore contractually liable to make the payment. It should therefore be ignored for calculating NMW. The HMRC appealed stating that the ‘conduct’ referred to in the NMW Regulations referred to misconduct or something similar such as negligence.

The EAT dismissed the appeal and held, whilst conduct of the worker did refer to misconduct, the words ‘or any other event’ would cover the resignation by the employee and the deduction should be disregarded when calculating NMW. However, it would have been a different outcome if the employee had been made redundant.

This case is useful as it provides clarity for employers as to which deductions can be made without infringing the NMW Regulations.

Employees’ use of personal social media accounts

The EAT has held that an employee’s dismissal for gross misconduct as a result of offensive comments he made on his personal Twitter account was fair.

In this case the employer was a games retailer which used social media, including Twitter, for marketing and communication purposes. The employee was a risk and loss prevention officer and was responsible for about 100 stores. The employee set up a personal Twitter account and followed the accounts of the store which he was responsible for, although he did not state in his profile that he worked for the company. He did not change the privacy settings on his account so it was visible to the general public. A concern was raised by the employee’s manager that he was making offensive comments on Twitter and when it was investigated, 28 offensive comments were found. The employee was dismissed for gross misconduct. The employee brought an unfair dismissal claim.

The ET found that the dismissal was unfair due to being outside of the range of reasonable responses by the employer as the comments were made on a personal Twitter account for private use. The employer appealed.

The EAT allowed the appeal, finding that the dismissal was fair. The EAT found that the Employment Tribunal had failed to take account of the fact that the employee’s comments could be viewed by all of the stores that were following him and would be seen by staff. In addition, the fact that he had not changed the privacy settings meant that his comments were not private and could be seen by the general public, including potential customers.

This is a good reminder of the issues arising from the use of social media by employees. This case may have had a different outcome if the employee had ensured his privacy settings were changed. The employer in this case did not have a comprehensive social media policy that prohibited offensive comments. However, most of the cases on social media to date have turned on whether the employer had a clear social media policy in place. If you would like us to review your current social media policy, please contact a member of our Employment Group.

Right to unilateral variation unenforceable

In a recent case, the EAT held that a contract which reserved the right to make unilateral changes to terms and conditions of employment was not enforceable due to poor drafting. The clause allowing the employer to make unilateral changes did not state that the employee was bound to accept the changes and was therefore unenforceable.

This ruling illustrates the fact that a clause which reserves the right to unilaterally change terms and conditions of employment is difficult to enforce and the tribunals are reluctant to do so. Therefore, clauses that reserve the right to make unilateral changes need to be carefully and properly drafted to give an employer the best chance to rely on them.

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

Christopher Gigg [email protected] +44 (0)115 934 3310

Kathryn Meir [email protected] +44 (0)115 934 3308