Monthly Archives: July 2015

Consultation Launched About Trade Union Bill

The government has just launched consultation about the Trade Union Bill as they propose to reform strike ballot laws and modern trade union law. The consultation will close in September 2015.

The main proposals are:-

industrial action will require a 50% turnout
40% of all eligible voters must vote in favour of industrial action which affect important public services
the ban on using agency staff to cover striking workers will be lifted
a 4 month limit on a strike mandate, after which another ballot is required
more specific requirements for the wording of the ballot paper
banning automatic opt-ins to political donations from trade union subscription fees
increased notice to employers so they can prepare and put contingency plans in place
tackle intimidation of non striking workers

The government has published the draft Trade Union Bill, along with three separate consultation documents on ballot thresholds in important public services, hiring agency staff during industrial action and tackling intimidation of non-striking workers.

The Government claims that the proposed legislation,will create greater transparency around union practices and will ensure strikes are the result of a clear and positive democratic mandate from union members after all other possibilities have been explored.

This has of course angered unions as they claim it would make all legal strikes impossible.

Consultation Launched On Gender Pay Gap Reporting

The government equalities office has just launched a consultation on gender pay gap reporting which will close on 6 September 2015. The reason for this is that the government is committed to introducing regulations that will require companies to publish their gender pay gaps clearly identifying the differences between average pay for males and females.

Research has shown that the UK falls way behind in the league table of worldwide equal pay. Iceland, Finland, Norway and Sweden are the top ranking countries for equality. Four decades on from the Equal Pay Act working women in the UK continue to lose out.

The regulations will only apply to companies in the UK with at least 250 employees so small and medium sized businesses will not be affected. Furthermore public authorities will not be included as they already have broad equality obligations compared to the private sector.

The regulations will be in place by March 2016 but will not take place immediately so that employers have time to prepare for implementation.

The Government appears to be considering the following options in terms of what will be reported:

1. Reporting one overall gender pay gap figure that captures the difference between the average earnings of men and women across the organisation as a percentage of men’s earnings.

2. Reporting separate gender pay gap figures for full-time and part-time employees.

3. Showing the difference in average earnings of men and women by grade or job type.

Highlighting pay differences could expose companies to equal pay claims. There will therefore be the need to put pay decisions in context as there may be fair reasons for these.

A failure to comply with the rules could, ultimately, be treated as an offence, attracting a fine.

In anticipation of the regulations being implement employers should consider the following actions:

• Be proactive – doing nothing is not an option. Understanding your pay arrangements will help you manage and present information meaningfully and in context.

• Review all current pay practices across your organisation in order to understand the differentials which may exist.

• Consider gender pay gaps which exist on a departmental/geographical/functional level and compare these with the composition of your workforce.

• Analyse the rationale behind your current arrangements to identify potential risk areas.

• Consider implementing a job evaluation scheme which will help provide defence for pay gaps

A link to consultation paper can be found at https://www.gov.uk/government/consultations/closing-the-gender-pay-gap

Employers will ultimately have to address gender pay gap issues.

Employee Sickness and Holiday Carry Over – 18 Month Time Limit

The Employment Appeal Tribunal (EAT) has recently clarified that where an employee has untaken leave that they have been unable to use because of long term sickness there is to be an 18 month time limit to do so. The 18 months starts from the end of the leave year in which it should have been taken. Workers have been able to carry over four weeks leave if they have been on long term sick as decreed by HMRC v Stringer in 2009 and was linked to the Working Time Regulations 1998. An employee’s contract may, however, provide for additional holiday carry over.

The decision to add the 18 month time frame was linked to Plumb v Duncan Print Group Ltd. The EAT stated the worker doesn’t need to show that they were physically “unable” by reason of sickness to take the holiday during the leave year in which they were off sick. Although employees can take their holiday during a period of sickness some may choose not to.

Background to the Case

Mr Plumb had been on sick leave since April 2010 due to an accident at work. He did not take his annual leave for 2010, 2011 and 2012 leave years. In July 2013 he was asked to take all the annual leave that he had accrued. The employer only paid him his leave for the year in which he requested it ie 2013-14 and refused to pay the leave untaken from 2010, 2011 and 2012 which amounted to 60 days. He remained on sick leave until his termination of employment in February 2014 and put in an employment tribunal claim.

The EAT decided that a worker should not be entitled to have their holiday carried forward indefinitely as defined by the Working Time Directive and EU case law. Therefore workers who have been absent for a number of years will not be entitled to back pay for holiday that they have accrued and not taken.

In any case wherever possible I always advocate employers should deal with long term absence issues to prevent employees being off for months and certainly not years on end.

Tips on Rolled Up Holiday Pay

In 2006 the European Court of Justice ruled that rolled up holiday pay was illegal, however, almost ten years later some businesses in the UK still use this to pay casual staff on zero hours contracts. The law in the UK remains confusing on this issue so here are some tips on rolled up holiday pay.

The decision by the ECJ decided three things:

1) it is contrary to the working time directive for holiday pay for statutory holidays to be rolled up into normal pay instead of actually being paid during the holiday.

2) Countries who are members of the EC must take ‘appropriate measures’ to ensure that the practice of rolling up ceases.

3) However sums already paid would still count towards pay for holidays.

When the decision came from the ECJ it took a year for the UK government to state that rolled up holiday pay was unlawful. However, the focus was on the worker to approach their employer to re negotiate the contract and if the employer was unwilling to then the worker could go to an employment tribunal. Many casual workers on zero hours contracts have precarious security with their employment as the terms are mutual no obligation. The employer has no obligation to offer the worker work and under these circumstances an employer if challenged could arguably decide not to provide any further work to that person. For the worker to take a case to an employment tribunal they would need to pay a hefty fee which is arguably prohibitive for someone who has received a relatively low wage then ultimately may have no income. These two things create a barrier for a worker trying to sort out rolled up holiday with their employer.

Nevertheless, the ideal thing is for an employer to review and amend a zero hours contract that operates rolled up holiday pay and this is what I would advocate given that the government decreed, in accordance with the Working Time Directive, that holiday pay should be paid at the time of holiday. To renegotiate the contract there should be consultation and written agreement in the form of a signed new contract. To comply with the government’s proposal an employer should keep accurate records of hours worked and provide holiday pay when the worker actually requests holiday.

However, this can be quite onerous if a business operates with a large pool of casual workers on zero hours contracts and in many cases casual workers like to have rolled up holiday pay. If a business wishes to continue to operate rolled up holiday pay because they find that easier there are ways to reduce the risks and costs of an employment tribunal claim.

The main principle is to operate rolled up holiday pay comprehensively and transparently. Workers should clearly know and understand how the process will operate. As with all things HR, written records are essential for the paper trail. Rolled up holiday pay should be clearly stated in the contract showing the 12.07% allowance in the hourly rate. Wage slips should also clearly show the percentage payment of rolled up holiday pay. In addition the employer should operate a holiday booking system where workers have to book their 5.6 weeks pro rata holiday and be encouraged to take their entitlement in a twelve month period. If that is proving difficult because a worker is doing many hours on a weekly basis that is a definite impetus for the employer to review and amend the contract to accurately reflect the working practices with an employment contract.