Welcome to our July employment law update, where we look at the latest interesting cases from the employment tribunal.
The holiday season is upon us, just in time for the next instalment of the holiday pay saga that has been making its way through the courts for quite some time. For full case updates, please sign up to our monthly newsletter here.
In Flowers v East of England Ambulance Trust, the ambulance workers said that two types of overtime should be included in holiday pay: non-guaranteed overtime (when they were required to stay late at the end of a shift) and voluntary overtime. They brought claims based on what their contracts said as well as the provisions of the Working Time Directive. The employment tribunal said non-guaranteed overtime should be included in holiday pay, but voluntary overtime should not. The Employment Appeal Tribunal disagreed and said both should be included.
The Court of Appeal agreed with the EAT. The employees had a contractual right for holiday pay to include overtime. However, the Court said the situation was the same under the Working Time Directive. Voluntary overtime should be included in holiday pay calculations where the overtime is regular enough to be considered part of normal pay. The fact that the overtime is voluntary is irrelevant. If this weren’t the case, workers might be discouraged from taking annual leave which defeats the purpose of the legislation.
This is not the outcome employers wanted but it does not come as a surprise. The Court noted the policy reasons involved. If voluntary overtime were not included in ‘normal remuneration’, an employer might get around the law by setting low basic hours topped up by significant ‘voluntary’ overtime’. The judgment included some debate on a case from the Court of Justice of the European Union (Hein) which seems to contradict this position, so we may not have heard the last on this subject.
Holiday pay is also the focus of Chief Constable of the Police Service of Northern Ireland v Agnew in which an employment tribunal in Northern Ireland opted not follow the Bear Scotland rule. They said a series of deductions was not broken by a gap of 3 months or more. This does not apply to England, Scotland or Wales but could have significant implications in Northern Ireland with potential for holiday pay claims to go all the way back to 1998.
It may be time for NDAs to take a break; the Women and Equalities Committee has published a report expressing concern about the widespread use of confidentiality clauses in settling discrimination cases. The report contains a number of recommendations to tackle the issue, including appointing board level business (not HR) managers to oversee employers’ discrimination policies and their use of NDAs in discrimination cases.
Disability discrimination had its day in the sun in Chief Constable of Norfolk Police v Coffey. But interestingly, it was a perceived rather than an actual disability that was at the heart of the case. A Police Officer was refused a transfer based on her hearing loss. Although her hearing fell just below the national guidelines, she would likely have passed a hearing test as she was already doing the job elsewhere.
However, the employer perceived that her hearing was a progressive condition that would stop her being able to do the job in future and refused to employ her as a result. The Court of Appeal held that the employer had discriminated against the employee because of perceived disability.
Things got a little heated in the case of Simpson v Cantor Fitzgerald Europe when an employee with short service sought to claim that he was dismissed because he had blown the whistle on malpractice. The Judge described the alleged whistleblowing as cryptic, speculative, over-general and ‘a figment of his imagination’. A refreshingly honest judgement in relation to a seemingly vexatious case.
Whilst in the case of Heskett v Secretary of State for Justice, employees were hot under the collar when a change to probation officers pay-scales meant that younger workers took longer to get to the top of the scale and were paid less than their older colleagues. The employment tribunal found that the policy was indirectly discriminatory but could be justified based on the employer’s absence of means linked to government funding cuts. This is a finely balanced example of the costs-plus rule as discrimination cannot be justified based on costs alone.
And finally, it looks likely that the existing Gender Pay Gap obligations will be extended following a recent report that suggested the gap is still widening. Have you got your head around the reporting obligations? If not, check out our simple explainer video below.
We’re going to take a short break in August, but we will be back in September with all of the employment law decisions you need to know about.