Information for Employers

No Longer Reclaimable – Statutory Sick Pay

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The Government is to launch a new Health and Work Service that will offer a helpline and website from April 2015. This will also provide for free occupational health assessments where the employee has been off sick for a period longer than 4 weeks. The idea is that it will help employers save money by getting employees back to work quickly.

As they say there is no such thing as a free lunch. There is a sting in the tail which has not been overly publicised. The Government currently has a percentage threshold scheme whereby employers could reclaim any amount of statutory sick pay which exceeded 13% of its national insurance contributions in any month. This costs the State an estimated £50 million a year. This has been abolished from 6th April 2014 so the savings from this scheme will fund the new Health and Work Service next year. The rationale for abolishing it was that it gave employers an incentive not to encourage long term sick workers back into the workplace.

Certainly in the interim this will create an additional costs burden on employers. The rate of SSP will also increase at the same time by 1% so to £87.55 up from £86.70 per week. Another change is to the administration of sick pay and the government will abolish the statutory sick pay record-keeping obligations and allow employers to keep records in a flexible manner more suited to their organisation.

Written by
Edward Aston
11th April 2014

Zero hours in the news again

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The topic of zero hours has been in the news again with three developments. Firstly, consultation on the topic is currently underway and is due to close on the 13th March 2014. The points for discussion are situations where workers on zero-hours contracts are subject to a clause preventing them from working elsewhere and secondly issues over the lack of transparency over the terms of the contracts, access to employment rights and the uncertainty of income. Employers who want to have their say have a little longer to do so.

Secondly, ACAS’s Chief Executive Anne Sharp has identified zero-hours as one of the three key areas for 2014. Finally, a Private Members Bill was published on 23 January 2014. The Bill aims to prohibit the use of zero-hours contracts and is due to have its second reading debate at the end of February 2014. The Bill has a rather narrow definition of the type of zero-hours contracts it is seeking to prohibit. It defines them as contracts where the contract fails to specify guaranteed working hours, but requires the worker to work (or be available for work) exclusively for one employer.

Historically, Private Members Bills do not have a good track record of ever becoming law so watch this space.

Written by
Edward Aston
20th February 2014

Constructive Dismissal – Reason for Leaving Test

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In a constructive unfair dismissal claim, does the breach of contract by the employer have to be the principal reason for the employee’s resignation?

No said the EAT in Wright v North Ayrshire Council.

The Claimant was employed by the Council as a care at home assistant for just under seven years from 3 December 2003 until her resignation on 24 November 2010. She claimed that there had been a constructive dismissal. The Employment Tribunal here found that there had been breaches going to the root of the contract. Those breaches were in respect of three grievances which had not properly been answered. Two were never responded to and the third was not responded to timeously. However, the Employment Tribunal found that the Claimant’s caring responsibilities for her partner who had suffered a stroke was the “effective cause” of her resignation rather than her employer’s conduct and dismissed her claim.

The EAT found that the Employment Tribunal were wrong to have dismissed the employee’s claim for constructive dismissal on this basis. The EAT held that the repudiatory (i.e. fundamental) breach of contract does not have to be “the” effective cause for the employee resigning but “an” effective cause. In other words, it does not have to be the main reason for resigning it just needs to be one of the reasons. The Employment Tribunal will however take into account the extent of the role played by the breach when calculating the compensation award.

In the case in hand, the EAT remitted the case back to the Employment Tribunal to decide whether the employer’s repudiatory breaches (which it had found) played a part in her resignation from the service of the Council.

Written by
Edward Aston
25th November 2013

Financial Penalties for Employers – Likely Commencement Date

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Section 16 of the Enterprise and Regulatory Reform Act 2013 (“the Act”) will be implemented in April 2014 according to Jo Swinson (Minister of Employment Relations). This section, when in force, will empower Tribunals to impose financial penalties on employers where they breach a workers rights and there are “aggravating features” The penalty will be 50% of any award made with a cap of £5,000 which is reduced to half if paid within 21 days of the award being made.

Over the Summer the Department for Business, Innovation and Skills had initially said that it had “no current plans” to implement Section 16 of the Act but the Minister of Employment Relations has since said, “we plan to” implement this Section “in April 2014.”

Written by
Edward Aston
25th November 2013

Sickness Absence and Holiday Pay

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In the recent EAT case of Sood Enterprises v Healy it was held that additional annual leave cannot be carried forward into the next leave year, unless there is an agreement in place between the parties.

One of the difficult questions concerning the relationship between statutory holiday rights and long-term sick leave is the apparent incompatibility between regulation 13(9) of the Working Time Regulations 1998 and the Directive regarding carry-over of holiday for workers who have been unable to take the holiday due to sickness. In 2012, the Court of Appeal took the view in the case of NHS Leeds v Larner that it was possible to interpret the Working Time Regulations 1998 in line with the Directive so as to allow carry over of holiday of up to 4 weeks (i.e. 20 days) where a worker was on long-term sick leave. However, the court declined to decide whether the Directive requires the additional 1.6 weeks (i.e. 8 days) under regulation 13A to be treated in the same way as the four weeks’ leave under regulation 13.

In Sood Enterprises v Healy, the EAT have confirmed that the Working Time Directive does not require carry-over of the additional 1.6 weeks’ leave under regulation 13A of the Working Time Regulations 1998 where a worker is prevented from taking holiday due to long-term sickness absence.

So at the present time, if, for example, a worker is on long-term sick leave for the whole of 2013 and their holiday entitlement is the statutory minimum 28 days, then 20 of those days automatically carry forward into the next leave year (i.e. into 2014) and the remaining 8 days do not, unless there is an agreement between the employer and the worker for the 8 days to be carried forward. That is the position for the time being and will remain so unless and until a higher court rules otherwise or it is changed through legislation.

Written by
Edward Aston
6th August 2013

The Employment Tribunal Fees Order

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As of this Monday (29th July 2013) all new claims made to an Employment Tribunal or appeals to the Employment Appeal Tribunal (EAT) will carry an issue and a hearing fee payable by the Claimant. The new legislation is ordered in The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013

Claims have been split into two levels with each level carrying a different fee amount.

Type A Claims are more straight forward and hence carry a lesser fee and include cases such as unlawful deduction of wages, payment in lieu of notice and redundancy payments.

Type B Claims cover pretty much everything else including unfair dismissal, discrimination and Whistle blowing. The one anomaly is Equal Pay which currently sits under Type A although the MOJ has stated that ministers do intend to review this and Equal Pay may well sit under Type B in the future.

Please see below a table detailing the issue and hearing fees for each type of Claim for an individual Claimant

Issue Fee Hearing Fee
Type A £160.00 £230.00
Type B £250.00 £950.00

 

For claims made by a group of Claimants the fees will be as follows

Type A 2-10 Claimants 11-200 Claimants Over 200 Claimants
Issue Fee £320 £640 £960
Hearing Fee £460 £920 £1380

 

Type B 2-10 Claimants 11-200 Claimants Over 200 Claimants
Issue Fee £500 £1,000 £1500
Hearing Fee £1900 £3,800 £5,700

 

Claimants on low incomes or who are in receipt of certain qualifying benefits (e.g. job seekers allowance) will be able to apply for full or part fee remission details of which are detailed in Schedule three of the Order.

It is worth noting that where Claimant’s are successful in an Employment Tribunal the Employment Tribunal may make an Order for the Respondent to pay the Claimant back for the fees they have paid in addition to any other award the Tribunal will make. The current thinking is that Tribunals are likely to do this as a matter of course.

Written by
Edward ton
31st July 2013