Employment Update – Spring 2017

Protected Conversations

Since 2013 employers have been able to initiate “protected conversations” with employees to discuss the possibility of ending employment on agreed terms. Provided the conversation is conducted in a certain way what is discussed cannot then be used as evidence in any subsequent unfair dismissal claim.

A recent case has clarified the limits on the use of “protected conversations” and other forms of “off the record” negotiations. The message is that although such negotiations can be valuable tools in agreeing severance arrangements, care must be taken in order to avoid the very fact of such discussions being used against the employer in employment tribunal proceedings.

Faithorn Farrell Timms LLP v Bailey UKEAT/0025/1

ACAS early conciliation

Before commencing a claim in the Employment Tribunal employees must first contact ACAS to explore the possibility of using their early conciliation service. It is only if that conciliation fails or a decision is taken not to pursue negotiations that ACAS will issue the certificate which is needed by the employee in order to commence an Employment Tribunal claim.

and a further 30% after proceedings have been issued. These figures do not include those cases which may have been settled by the parties direct by a Settlement Agreement negotiated through their solicitors.

Remember – a “gentleman’s’ agreement” is not effective to settle employment law claims.

Pension auto enrolment

As of 1 April 2017 all businesses which have been set up for five years or more should have enrolled qualifying workers into an approved pension scheme.

Businesses set up within the last five years may have staging dates between 1 May 2017 and 1 February 2018 but time is now very short and the exact date should be checked as quickly as possible. Once this is known urgent steps may be needed to comply with the auto-enrolment rules.

Annual changes to employment rates

The following changes took effect from 1 April 2017

National Minimum Wage
Aged 25 and over£7.50 (the living wage)
Aged 21 to 24
Aged 18 to 20
Aged 16 to 17£4.05
Apprentice rate£3.50

Statutory maternity, paternity, adoption, and shared parental pay – £140.98 or 90% of the employee’s average weekly earnings, whichever is lower.

Statutory Sick Pay – £89.35 per week

Maximum week’s pay (for redundancy and unfair dismissal basic award calculations) – £489

Maximum compensatory award for the majority of unfair dismissal cases – £80,541

New Limits

Gig economy

The recent cases involving Uber, Deliveroo, Pimlico Plumbers and CitySprint have underlined the importance of correctly identifying the employment status of individuals. Even if someone is not an employee they may still be classified as a “worker” and therefore entitled to benefits such as paid holiday leave and pension enrolment.

It is not enough to simply attach a label to the relationship or even dress up the contractual documents in an attempt to secure the status of self-employment. Instead the Employment Tribunal or tax authorities will look at how arrangements operated in practice in order to determine employment status.

Aslam and others v Uber BV and others ET/2202550/15

Commission holiday pay

The recent case of Lock v British Gas has held that holiday pay should include the (results-based) commission that a worker would ordinarily earn. This can have very significant consequences for employees whose income varies according to results achieved, such as sales people.

Although the government have indicated they will review this ruling in the light of Brexit, in the meantime businesses should review their holiday pay arrangements and ensure that holiday pay takes account of the rules regarding commission which would otherwise have been earned.

British Gas Trading Ltd v Mr Z J Lock

If you have any employment law queries please email Richard or contact him on 01483 361 095. He is happy to have an initial chat or exchange of emails free of charge.

The information in this update is a general summary of the law only. As every case is different you should seek specific legal advice before taking any action

© Richard Brown, May 2017
[email protected]

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