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Russell Cooke Solicitors - Employment Law Update

 


March 2012

 
 

Welcome to the latest edition of the Employment Law Update brought to you by the employment team at Russell-Cooke. The aim of this service is to keep you informed of recent developments in this fast moving field of law so that you are better prepared to deal with issues as they arise in your workplace and recognise when professional advice might be required.

Contact details for members of the team are provided at the end of the Update. If you have a query about the issues covered or about any employment law related matter please do not hesitate to get in touch.

IN THIS UPDATE:

  • Increases in statutory payments, statutory redundancy pay and other tribunal awards
     
  • A round up of forthcoming changes in employment law
     
  • Sickness absence and holiday pay
     
  • Cost and reasonable adjustments
     

This material will shortly be available at our website together with an archive of past updates (there is also the facility to sign-up to receive the updates here too).

 

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Increases in statutory payments, statutory redundancy pay and other tribunal awards

Tribunal Awards


The following increases took effect from 1 February 2012:

  • The limit on a week’s (gross) pay when calculating statutory redundancy pay will increase from 400 to 430.  This limit is also used for calculating the basic award for unfair dismissal and awards for failure to consult under TUPE.
  • The cap on the compensatory award for unfair dismissal will increase to 72,300. 
  • In successful claims of automatic unfair dismissal on health and safety, trade union, employee representative or occupational pension trustee grounds, a minimum basic award will apply and this will increase to 5,300. 


Statutory Payments
 

From early April 2012:

  • The rates for statutory maternity pay, statutory paternity pay and statutory adoption pay will increase from 128.73 to 135.45. The weekly earnings threshold for these payments, which triggers the entitlement, will increase to 107. 
  • Statutory sick pay will increase from 81.60 to 85.85.  The earnings threshold will also increase to 107.

 

Future Reforms

A number of major changes in a range of areas in employment law have been announced recently and the first of these will start to take effect early this year.

- From 1 April 2012, the government intends to increase the qualifying period of service required to bring an ordinary unfair dismissal claim to 2 years.

- The government is also consulting on two alternative fee regimes for the Employment Tribunal system.

  • under option 1, a fee would be payable on issue of a claim or a counter claim; on dismissal of a claim after settlement or withdrawal; upon a request for written reasons or where there is an application for a review. There would be 3 fee levels, depending on the type of claim. Issues fees would be 150, 200 or 250 and hearing fees would be 250, 1000 or 1250.
  • under option 2, fees would largely depend on the stated value of the claim. The proposals set out a range of fees between 200 - 600 for different types of claims and an issue fee of 1,750 for any claim where the claimant is seeking an award of 30,000 or more.
  • under these proposals, if the claimant succeeded,, any fees paid would either be refunded or be paid by the losing party and fees would be waived for claimants who met certain financial criteria, or who were in receipt of certain benefits.
     

- The government is also proposing to introduce the concept of ‘protected conversations.’ These would allow employers to have discussions with employees, about issues such as performance, the contents of which could not be relied on in Tribunal proceedings. It is unclear at this stage what the practical impact of this measure would be, given in particular the right to be treated consistently with the duty of trust and confidence.

- Financial penalties for employers who lose Employment Tribunal cases are also being proposed.

- A review of sickness absence was published on 22 November 2011. Key proposals include:-

  • employees who have been absent from work for more than four weeks should be referred to a new independent assessment service
  • fit notes should address an individual’s capacity to return not only to his or her own job, but also to work more generally
  • after a 20 week absence employees should be considered for a job-brokering service that will seek employment opportunities beyond their current employer
     

- Changes to family friendly/parental leave rights, including:

  • unpaid leave for fathers to attend ante-natal appointments
  • the right to request flexible working to be extended to all employees with 26 weeks’ continuous employment
  • a new requirement for employers to consider requests “reasonably.”
     

- Reform of annual leave, including:

  • expressly providing that workers who are unable to take annual leave during the holiday year in which it accrues will be able to carry it forward
  • an amendment to the Working Time Regulations to allow leave which has not been taken due to the exercise of family rights to be carried forward
  • amending the current prohibition on paying statutory leave in lieu
  • requiring employees to carry over all or part of the additional 1.6 weeks’ leave in cases of a genuine overriding business need

 

Holiday pay and sick leave

The House of Lords case of Stringer v HMRC confirmed the general principle that employees on sick leave continue to accrue holiday and should receive the benefit of that holiday. The European case of Pereda v Madrid Movilidad went further and held that employees who fall sick during a period of annual leave are entitled to reclaim that leave and take it again at another time.

These cases raised a number of practical issues. The Working Time Regulations prohibits the carrying forward of leave from one year to the next and also prohibits payment in lieu of untaken leave except on termination. It was also unclear whether workers who had been on long term sick leave for years could now claim wages for lost annual leave for the whole period.

In the 2010 case of Fraser v Southwest London St George’s Mental Health Trust, the employee had been off work for approximately 3 years, before being dismissed by the Trust. For significant parts of the last 2 years of her absence, Ms Fraser did not receive any pay. She brought a claim for 4 weeks’ holiday pay for each holiday year. The EAT held that an employee on sick leave was required to formally take leave by serving notice that they were on leave (even if absent on sick leave at the time) before they were entitled to claim holiday pay. However, in Leeds v Larner, the Employment Appeal Tribunal came to the opposite conclusion and held that an employee on sick leave was not required to make a specific request for leave during their sickness absence in order for the leave to accrue and become due on termination, or carry over to the next holiday year, as appropriate. The issue is being considered by the Court of Appeal but in the meantime, organisations should retain sufficient funds to pay all accrued holiday pay which might be claimed by employees on long term sick leave if the Court of Appeal agrees with the EAT in Leeds v Larner.

In KHS AG v Schulte, the European Court of Justice gave some practical guidance on the issue of whether there can be a limit on the right to carry over annual leave. German national law provided that workers would lose any untaken annual leave after a ‘carry over’ period of 15 months, which began at the end of the relevant leave year.

The ECJ emphasised the importance of paid holiday but went on to hold that the use of such limits was compatible with EU law. However, employees must be given a substantial period of time after the expiry of the leave year within which to use up annual leave before it is lost and it must not be unduly difficult for employees to meet conditions imposed for taking leave.

Stringer v HMRC [2009] ICR 985

Pereda v Madrid Movilidad [2009] IRLR 959

Fraser v Southwest London St George's Mental Health Trust UKEAT/0456/10/DA

Leeds v Larner UKEAT/0088/11/CEA

KHS AG v Winifried Schulte Case C-214/10

 

Cost and Reasonable Adjustments

The EAT provided some helpful guidance in relation to the extent to which cost can be taken into account when considering reasonable adjustments.  In Cordell v FCO, the Tribunal was entitled to consider the cost of the adjustment as compared with the staff costs of the embassy in question and the employee’s own salary.  However, employers will be at risk of legal challenges if they wish to rely on cost alone to refuse a reasonable adjustment and advice should be sought in specific cases. 

Mrs Cordell worked as a diplomat in Poland and was profoundly deaf. The FCO employed a number of lipspeakers to provide full time support in Warsaw at an annual cost of approximately 146,000. After these arrangements had been implemented, the FCO introduced a formal policy for reasonable adjustments which required that any adjustment costing over 10,000 had to be assessed by an FCO support team, who would make a recommendation which would then be considered by the HR director. It was then for the HR director to make the final decision.

Throughout her employment in Poland, Mrs Cordell was commended for her work and she was subsequently successful in her application for a Deputy Head post in Astana, Kazakhstan. The offer was subject to various checks, including an assessment of the reasonableness of any required adjustments. The FCO assessed the costs of providing the necessary adjustments at approximately 300,000 per annum,. although this was revised down to approximately 250,000 following representations from Mrs Cordell. There was also some doubt as to whether it would be possible to find sufficient lipspeakers to provide full time support in Astana.

The claimant brought claims for disability discrimination and failure to make reasonable adjustments. She drew a comparison with the FCO’s policy for paying the school fees of the children of staff posted abroad. The Continuity of Education Allowance provided up to 25,000 per annum (the cost for children under the age of 13 was capped at 22,000 per annum). The claimant gave a number of examples of staff working abroad who had six or seven children and it was therefore possible that the annual cost for one family under the policy could be up to 175,000.

The Tribunal dismissed Mrs Cordell’s claim at first instance and the EAT upheld this decision. It was reasonable for a Tribunal to consider the level of cost in comparison with the staff costs of the embassy in Astana (the cost of the adjustments exceeded the full cost of employing all local staff) and the fact that the cost of the support exceeded Mrs Cordell’s salary by a factor of five. It was also relevant, but not determinative, that the costs would have consumed 50% of the FCO’s reasonable adjustments budget.

The EAT also noted that that there remained a real question about the practicability of providing full time lipspeaker support, regardless of the cost and therefore the basis for refusing to make the adjustments was not cost alone.

Cordell v the Foreign & Commonwealth Office UKEAT/0016/11/SM

 

 

Contact us:

The Employment Team
Russell-Cooke Solicitors,
2 Putney Hill,
Putney,
London
SW15 6AB

Tel: 020 8789 9111
www.russell-cooke.co.uk

 

This material does not give a full statement of the law. It is intended for guidance only, and is not a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Russell-Cooke.

© Copyright: Russell-Cooke,

The Employment Team at Russell-Cooke

Anthony Sakrouge (Partner) 020 8394  6504  Anthony.Sakrouge@russell-cooke.co.uk
Alex Bearman (Partner) 020 8394 6524  Alex.Bearman@russell-cooke.co.uk
Edward Wanambwa (Partner) - 020 8394 6445 Edward.Wanambwa@russell-cooke.co.uk
Fudia Smartt (Solicitor) 020 8394 6525 Fudia.Smartt@russell-cooke.co.uk
Emma O'Byrne (Solicitor) 020 8394 6537 Emma.O'Byrne@russell-cooke.co.uk
Kate Minett (Solicitor) - 020 8394 6557 Kate.Minett@russell-cooke.co.uk


Specialists in advising charities, not for profits, trade associations and public bodies

Jane Klauber (Partner) 020 8394 6483  Jane.Klauber@russell-cooke.co.uk
Deborah Nathan (Solicitor) 020 8394 6437 Deborah.Nathan@russell-cooke.co.uk   


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