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INSIGHT: Employment Law – Year in Review

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Last year saw a number of key cases in the headlines that may have a significant impact on employers. Susan Mayall, head of employment at Pearson, explores some of these in detail and looks ahead to 2015.

Holiday Pay Tribunal Trouble

Few of you would have missed the furore at the beginning of November with regards to the Employment Appeal Tribunal (EAT) case of Bear Scotland vs Fulton & others, which held that workers are entitled to be paid a sum of money to reflect non-guaranteed overtime as part of their holiday leave payments.

The most important thing to come out of this case for employers is that claims for arrears of pay will be out of time if there has been a break of more than three months between underpayments. In this instance, if an employee who works non-guaranteed overtime took two weeks annual leave in June 2014 and received their basic pay rather than their basic pay plus overtime, then by October 2014 they would be out of time to issue a claim for unlawful deduction from wages.

The EAT noted that the time limit point was most significant and gave permission for the employees to appeal. However, Unite, the union supporting the employees, is no longer planning to appeal so the true ramifications of this case will remain unanswered.

Following the Bear Scotland ruling, a taskforce was set up comprising of representatives from Government and business to look into limiting the effect on employers. This has resulted in The Deduction from Wages (Limitation) Regulations 2014, which as of 1 July states that non-guaranteed overtime cannot be backdated longer than two years, therefore limiting the potential cost to employers.

Susan Mayall, head of employment at Pearson, commented: “In the wake of the tribunal ruling last month it was feared that employers across the country could be liable for billions of pounds in backdated claims, which would have widespread implications for businesses.

“This new legislation removes this fear, giving clear guidance both to employers and their staff on the financial implications and rights around holiday pay relating to overtime.”

Collective Redundancy In The Spotlight

In February, the European Court of Justice will decide on the case of USDAW vs Ethel Austin and whether the collective redundancy consultation obligation should be limited to situations where 20 or more redundancies are proposed within 90 days at the same establishment.
The question is whether employees from various locations with less than 20 employees, such as the Ethel Austin and Woolworths stores, could be classed as working within the same establishment as other employees at different stores.

This decision will be particularly relevant going forward, especially since the profits of the ‘big four’ supermarkets have now been reported with Tesco, Sainsbury’s and Morrisons all reporting that they will close some of their underperforming stores, which is likely to result in staff redundancies.

The outcome of the CJEU decision may ultimately determine whether retailers will be obliged to group stores together when making redundancies and offer a collective redundancy consultation.

Where the collective redundancy obligation does apply, failure to consult effectively can expose the retailer to a claim for a protective award, which is worth up to 90 days’ pay per employee if awarded.

As an employment law specialist I will be keeping an eye on the outcome closely and both shop workers and retailers should pay attention to the decision too.

New Sick Leave Service Is Launched

A new independent assessment and advisory service aimed at getting people back to work and away from long-term sickness benefits was launched, with a phased roll out running until May 2015. As a result, employees that have been off work sick for four weeks or more will be required to go through this service.

The Government has been able to fund this service as a result of removing the ability for employers to claim back SSP contributions from their usual NI contributions.

Only time will tell whether this new service does in fact reduce the number of employees on long-term sickness absence.

Looking Ahead to 2015

From 5 April, the new scheme of shared parental leave and pay comes into force, which will mean that eligible working parents can share up to a total of 50 weeks of leave and 37 weeks of pay.

Also on the agenda for 2015 and early 2016, which has already been attracting a lot of attention in the national news, is the Government’s decision as to whether it will render exclusivity clauses in zero hours contracts unenforceable. However, the way this goes may depend on the winner of the General Election in May.

For more information about employment law issues, please phone Susan on 0161 684 6948 or email

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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