What effect would Brexit have on employment rights?

If, on 23 June 2016, the UK has voted to leave the EU what could be the effect for businesses and employees and the amount of employment law that comes from Brussels?  Once out of the EU the government could in theory repeal some of it but would any government really do that?

Many employment protections like equal pay, race and disability discrimination laws, and the right of return from maternity leave existed in some form in the UK before being imposed by Europe and much of it is regarded, by employers, employees as a good thing. Employment rights such as family leave, discrimination law and the right to paid holiday and family leave go further than the EU directives.

If the UK has voted to leave, there is up to two years’ notice during which time the parties would negotiate the terms of departure.  The UK will wish to stay in some sort of trading relationship with the EU and it will no doubt involve adherence to a certain amount of EU employment law.

So, gazing into my crystal ball, if freed from EU constraints what is likely that would actually change?

Agency Workers

The most likely review is the Agency Workers Regulations 2010 which are unwieldy, unpopular with business and many workers.

Discrimination

It is difficult to imagine any government, employees or employers arguing that they should be free to discriminate and any change to the existing regime of direct discrimination, indirect discrimination and harassment seems unlikely.

Family Leave

Rights to parental and family leave in the UK are a mixture of rights from the UK and EU. UK maternity leave and pay preceded the EU rights and are more generous in some respects. The new right to shared parental leave and the right to request flexible working are both purely UK domestic in origin.

Transfer of Undertakings and Protection of Employment (TUPE)

TUPE often attracts a bad press, but the principle that employees should transfer when a business changes hands or is contracted out is useful and is incorporated and priced into many commercial outsourcing agreements. It seems most likely that the government would make some minor changes to make it more understandable and business/employee friendly.

Holidays and working time

The right to statutory paid holiday under the Working Time Regulations 1998 (WTR) is now broadly accepted. However, there are aspects of this right and of other rights under the WTR that the government might want to tweak perhaps to give more a more flexible framework for the benefit of businesses and their employees.

Collective redundancy consultation

Collective redundancy consultation obligations are not particularly onerous and it is not obvious that businesses regard consulting with their employees as a burden that should be removed.

In conclusion

If we retain some EU law the UK courts are likely to continue to regard judgments of the ECJ on those laws as persuasive and pre-Brexit UK court decisions incorporating ECJ interpretation would continue to be binding on lower courts and tribunals.

If the UK has voted to leave the EU, it seems unlikely that our employment laws and rights would be transformed in any significant way, particularly in the short term, and as a country we would continue to develop further improvements to benefit the working lives of everyone.

 

Fired by text for being paid less than Minimum Wage

This September 2015 Tribunal case is a reminder to employers that if they do not pay the minimum wage and employees complain about it, it is not only unlawful but a high risk strategy to dismiss them.

A former chef who complained to his employer that he was not being paid the minimum wage was sacked by his employer by text.  The Chef was employed for 40 hours a week and was paid a salary which would have met the minimum wage had he worked his contractual hours.

However, in practice he worked about 60 hours a week, which meant that his hourly rate fell below the minimum wage.

He raised this with his employer after about 4 months and a few days later went off sick. His employer then sent him abusive text messages accusing him of falsifying his sickness and dismissing him for gross misconduct.

The chef brought a claim of unfair dismissal, claiming that he had been dismissed because he had exercised his statutory right and raised the issue of not being paid the minimum wage. The Tribunal found in the employee’s favour, and awarded him £15,000 compensation for unfair dismissal, arrears of pay and compensation for his notice period.

The case is a reminder that although employees normally need 2 years’ service in order to bring a claim of unfair dismissal, there are important exceptions. One of these is that the dismissal is due to the fact that the employee raised an issue that the employer had breached a statutory right in this case by not paying the minimum wage.   The employee reasonably believed that they had, they had raised it and were dismissed as a result.

It is essential that employers paying at or around minimum wage rates do not push or coerce their employees to work longer hours and as a result breach the Working Time Regulations, or to fire them if they complain.

What about dismissing by text?   It is effective in that it communicates the message, but hardly good for employee relations and will have an adverse effect on the remaining employees and customers or clients of their business through unfavourable publicity.  Any employer who behaves like this is likely to be on the back foot in any litigation.

LATEST UPDATE ON HOLIDAY PAY CALCULATIONS

Calculating Holiday Pay

STOP PRESS Commission Payments and Holiday Pay
British Gas has now appealed to the Employment Appeal Tribunal against the decision of the Employment Tribunal set out below  that employers must take into account commission payments when calculating pay for the four week holiday entitlement under regulation 13 of the Working Time Regulations. If British Gas is successful in its appeal, it is possible that commission payments of the type received by Mr Lock will be treated differently to overtime and may not have to be included in holiday pay.

In (Lock v British Gas Trading Ltd) the ECJ  ruled that commission must be factored into holiday pay with regards to 4 weeks leave. This wording has now been added to the UK’s Working Time Regulations.

What had not been confirmed is the appropriate reference period for that calculation, so until that decision is made the general view is that using a reference period of 12 weeks is likely to be appropriate. It will also depend on the frequency of commission payments and it is easy to see that where commission is paid less regularly, a 12 week period may not work. Employers will have to make a judgement call about the right reference period based on the facts of their particular commission arrangements until further guidance is given.

What overtime should be included?
Certain overtime should now be included into average salary for holiday pay and calculated only on the 4 weeks’ annual leave entitlement.

Guaranteed overtime
Guaranteed overtime is where the employer is obliged by the contract of employment to offer and pay for agreed overtime.
Workers should have their normal guaranteed overtime taken into account when they are being paid annual leave.
Non-guaranteed overtime
Non-guaranteed overtime is where there is no obligation by the employer to offer overtime but if they do then the worker is obliged by the contract of employment to work overtime.
Workers should have their normal non-guaranteed overtime taken into account when they are being paid annual leave.
NB Following an Employment Appeal Tribunal decision that holiday pay should now include non-guaranteed overtime in relation to 4 weeks holiday pay, this decision is binding on the Tribunal but is subject to any appeals – although no appeals have been lodged to date.
Voluntary Overtime
Voluntary overtime is where the employer asks the worker to work overtime and the worker is free to turn down the request as there is no contractual obligation on either side to offer or refuse overtime. There is currently no case law to suggest that voluntary overtime needs to be taken into account when calculating holiday pay.

How to calculate average pay
An employee’s pay whilst they are on holiday – and when they leave – will be calculated to reflect their average pay over the previous 12 week period. In addition, employers will need to review the records for the past year and where there is not a 3 month gap between holidays and make retrospective top up payments
Holiday pay and sickness
When a worker takes paid or unpaid sick leave, their annual leave continues to accrue. If the worker is unable to take their annual leave in their current leave year because of sickness, they should be allowed to carry that annual leave over until they are able to take it, or they can choose to take a period of annual leave while they are sick and be paid at their usual annual leave rate.
Once again an employee’s pay whilst they are on holiday – and when they leave – will be calculated to reflect their average pay over the previous 12 week period
The Government has recently introduced the Deduction from Wages (Limitation) Regulations 2014 which will come into effect on 1 July 2015. After that date, all unauthorised deductions from wages claims – including claims for underpaid holiday pay – that are started will be limited to deductions or underpayments suffered by the employee within the previous two years.
If you would like more information on calculating holiday pay, please do get in touch.

Carol

Tel: 01767 627127
Mob: 07850 185906
Email: mail@carolhscott.net

While every care has been taken in compiling notes, advice and guidance in employment Carol H Scott HR and Business Consulting Limited cannot be held responsible for any errors or omission. We do not warrant its completeness or accuracy; nor do we commit to ensuring that the website remains available or that the material on the website is kept up-to-date.
The notes, advice and or guidance are not intended as a substitute for specific legal advice

Training and Development

To invest or not to invest in training and development for your employees.

I’ve just read this and it’s a brilliant thought for the day for every employer:

Quote about employee training and development
How many boxes does this tick in your business?

If you want to know more about how to develop your employees, email me and let me know.

HMRC Name and Shame

One of the absolute employment essentials I talk with employers about is the exact details of their workers’ employment status and in particular the self-employed.

Whether they are employed or self-employed is not a matter of choice and depends on the terms and conditions of the role they carry out for you and the criteria HMRC use to correctly determine the employment status. HM Revenue and Customs (HMRC) are constantly on the lookout for ‘disguised employees’; that is those who claim self-employed status but are in fact employees.

HMRC has updated its list of tax cheats with individuals who are car dealers, electricians and hairdressers publicly named on its website.

Defaulters have been pulled up for evasion across a range of taxes including NI and PAYE.   The list includes Kevin and Deborah Mann, who owe £78,557 after dodging tax whilst running Electrical Installation and Repairs business Moonshine Ltd and D K Express and others on the list include a Yorkshire-based hairdresser who owes £19,000, the owner of an Off Licence who must pay back £21,500 and a farmer who was given a penalty of some £10,000.

The move to name and shame has caused some controversy, with critics arguing that HMRC is focusing on ‘easy target’ small firms while some international corporations go unpunished.

Contact me now if you have any workers claiming to be self-employed, casual, temporary or any other status to make sure that HMRC doesn’t come knocking on your door and then have your company name at the top of the list for the next decade as a company worth visiting on a regular basis.