HOLIDAY PAY ON TERMINATION? (June 2023)

A recent GB EAT case considered holiday pay on termination and whether it differed to holiday pay during employment.

Regulation 14 of the GB Working Time Regulations 1998 states (paraphrased):

(3) the payment due under paragraph (2)[holiday pay on termination] is:

      (a) such sum as may be provided for… in a relevant agreement; or

      (b) where ..no relevant agreement….then sum equal ….determined according to formula– (AxB)−C…..

where:- 

A is the period of leave the worker is entitled to

B is the proportion of the leave year which has expired prior to termination date

C is the period of leave taken between start of leave year and termination date

The EAT appeal asked two questions:

(1) Is there default method to calculate accrued but untaken holiday pay on termination?

(2) Can an agreement provide for pay less favourable than the default calculation?

Facts:

The Claimant was employed from 1 November 2002 until 29 May 2020, when he was dismissed. He was suspended from work on 8 February 2019, signed off ill on 20 February 2019 and did not return to work.

The Claimant worked 37 hours per week and was paid monthly. His annual salary was £29,064.00.

The Claimant’s contract stated that, on termination, holiday pay would be paid as follows:

“Payment will be based on 1/365th of annual salary for each day’s leave. Any payment will be subject to the usual statutory reductions.”

It was accepted that the above term constituted a relevant agreement.

For holidays taken during employment, the Claimant was paid a normal week’s pay. On termination, the employer used the 1/365 calculation (as per the contractual term) meaning he received less than he would have been paid had he taken the holiday during his employment (i.e. less than a normal week’s pay).

The Tribunal found that the contractual term was a relevant agreement which modified holiday pay on termination of employment.

EAT FINDINGS

The EAT found that the contract term could not result in lower pay than would be payable under the working time regulations.

The EAT judge found that the parties had complicated the matter; this was simple as the claimant had an annual salary and set hours.

in answering whether a relevant agreement or employment contract can impact holiday pay on termination, the judge repeated that workers should get normal pay for any holiday.

A relevant agreement must provide a formula which is in keeping with those working time regulation rights and cannot provide for a calculation that means that an employee is paid less than the normal pay.

SUMMARY

Holiday pay issues continue to rumble as we await the Agnew Supreme Court decision (indeed this case referred to Northern Ireland Court of Appeal Agnew Judgment).

This case dealt with a net point that, despite the wording in any relevant agreement or employment contract, employees must also receive their normal pay for accrued but not taken holiday pay on termination.

ELECTRONIC TRAVEL AUTHORISATION VISA COST ANNOUNCED (June 2023)

On 7 June 2023, the Home Office updated its Link to Guidance and Fact Sheets to confirm the price of the  Electronic Travel Authorisation (ETA) confirming that the cost of the ETA will be £10 per applicant.

An ETA is a new requirement for people who need a visa for short stays to the UK, or who do not already have a UK immigration status prior to travelling. It gives the person permission to travel to the UK, and it is electronically linked to their passport. It will permit multiple journeys and be valid for two years or until the holder’s passport expires – whichever is sooner.​​

It will launch for Quatari nationals from 25 October 2023. From 1 February 2024, the scheme will be introduced for nationals of Bahrain, Jordan, Kuwait, Oman, United Arab Emirates and Saudi Arabia.

GREAT BRITAIN: HAT TRICK OF NEW BILLS BECOME LAW

On 24 May 2023 three Private Member employment related Bills received Royal Assent and passed into law.

In its press release, Workers’ rights wins for parents and carers the Department for Business and Trade said that this follows a wave of wins for workers after a record National Minimum Wage uplift and measures to ensure staff can keep their hard-earned tips. These new laws mean parents and carers will have new protections at work, covering leave entitlement and redundancy rules.

The New Acts that apply in GB are:

1. Neonatal Care (Leave And Pay) Act 2023

This is a Day 1 Right for parents to take up to 12 weeks of paid (statutory) leave if:

• the baby is born prematurely or;
• the baby is sick and is cared for in hospital or other care setting for babies up to 28 days old, and who stay in hospital for 7 or more days.

The purpose of this Act is to that they can spend more time with their baby at what is a hugely stressful time. This is in addition to other leave and pay entitlements such as maternity and paternity.

2. Carer’s Leave Act 2023

When implemented this will entitle all unpaid carers to one week’s flexible unpaid leave per year to deal with caring responsibilities for a dependant with a long-term care need. The government states that this will enable carers to better balance their caring and work responsibilities, supporting them to remain in employment. 

3. Protection from Redundancy (Pregnancy & Family Leave) Act 2023
   
   This allows for Regulations to be made that will extend redundancy protection from the date the employee notifies their employer of pregnancy until (what is believed will be) six months after end of leave. Currently, employees have special protection during their maternity leave.

General

There are currently no implementation dates at present for any of these new rights to come into force. Importantly the new laws only to England, Scotland and Wales. It will be for the Northern Ireland Assembly to decide whether similar provisions should apply in Northern Ireland.

NEW GB CONSULTATION: WORKING TIME & TUPE (May 2023)

Following on heels of GB Government’s announcement on Thursday 11 May 2023, on Friday 12 May 2023 the Department of Business and Trade published the Retained EU Employment Law Consultation on reforms to the Working Time Regulations, Holiday Pay, and the Transfer of Undertakings (Protection of Employment) Regulations

The Summary section states:

“These proposals do not seek to remove rights, but instead remove unnecessary bureaucracy in the way those rights operate…”

The consultation seeks views on three areas of retained EU employment law which could benefit from reform which are set out below.

Interestingly, it also confirms regulations that will not be reformed and further regulations (unrelated to TUPE and Working Time) that will be revoked (see below).

1.   Record keeping requirements under Working Time Regulations:

Removing need to record daily working hours of workers.

 The Consultation refers to the 2019 judgment of the Court of Justice of the European Union (Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE) ruled that employers must have an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured. That case held that records must be kept in relation to the:

• right to minimum daily rest period of 11 consecutive hours in each 24-hour period;

• the right to a minimum uninterrupted period of rest of 24 hours in each seven-day period;

• and the limit on the maximum weekly working time.

The GB Government believes that these record keeping obligations are disproportionate, and proposes to remove these requirements.

2.   Simplifying Annual Leave and Pay Calculations:

The Consultation document helpfully sets out the legal  difference (see Pages 16 and between the 4 weeks Working Time Directive Leave and 1.6 weeks additional leave provided under UK legislation ( The Working Time Regulations).

The GB Government proposes:

• Creating one singular pot of leave (a total of 5.6 weeks) so that the same rules apply to all; the Consultation propose setting out the minimum rate of holiday pay and arrangements for carrying over leave in legislation, alongside introducing rolled-up holiday pay as an additional option for calculating holiday pay.

• To define the rate of holiday pay in legislation. It asks views on whether the entire 5.6 weeks of leave should be paid at a worker’s normal rate of pay recognising that due to the administrative burden of having to pay leave at differing rates many employers already do that. Against that it is cognisance of the additional financial burden on employers

• Through the consultation, it seeks views on what should be included in the definition of ‘normal remuneration’ and believes it would be significantly challenging to write into legislation. The government is seeking views from employers and workers on how holiday pay is currently calculated and how they think it should be defined in legislation.

• Permitting rolled up holiday pay lawful. The right to paid annual leave is key to ensuring that workers remain adequately rested to protect their health and safety.

The Government is seeking views on making ‘rolled-up’ holiday pay lawful for all workers. Rolled-up holiday pay is a system where a worker receives an additional amount or enhancement with every payslip to cover their holiday pay, as opposed to receiving holiday pay only when they take annual leave. This proposal would give employers a choice between using the existing 52-week holiday pay reference period and rolled-up holiday pay to calculate holiday pay for their workers with irregular hours.

**This part is most likely to have most significant impact on businesses**

3.    Consultation requirements under TUPE

This includes a sensible proposal which will benefit small employers of allowing smaller employers to consult directly i.e. there will be no need to elect representatives.

Areas not being considered for reform

The Consultation document separately lists areas/rights that will be preserved and not considered for reform at this time.

These are:

• Maternity and Parental Leave etc Regulations; Paternity and Adoption Leave etc Regulations.

• Part-time & Fixed-term Employees Regulations;

• Agency Workers Regulations;

• Information & Consultation of Employees Regulations and Transnational Information and Consultation of Employees;

• Those aspects of the Working Time Regulations and TUPE Regulations that are not covered in Consultation.

It also identifies Regulations that will be revoked , which are:

• Posted Workers Regulations;

• Posted Workers (Agency Workers) Regulations;

• European Cooperative Society (Involvement of Employees) Regulations;

Territorial Jurisdiction

Not unexpectedly, it clearly states that the proposals do not represent the established policy position of Northern Ireland Executive or Assembly as employment law is devolved.

End Note

The Closing Date for responses is 7 July 2023.

Clearly from business perspective there are some sensible proposals being put forward but there is still a lack of detail on how the Government proposes to make the vexed issue of calculating holiday pay simpler. It is hoped that whatever approach it takes it does not instigate more litigation. And again our unique position in Northern Ireland means that we get to watch this Consultation in the hope that if Executive is restored, some of the learnings will influence the direction here.

EQUALITY COMMISSION 32nd MONITORING REPORT (April 2023)

On 21 April 2023, the  Equality Commission for Northern Ireland (ECNI) published its 32nd Monitoring report 32nd Monitoring Report

The statistics for the breakdown of the monitored workforce in Northern Ireland by community background show that there was total monitored workforce of 564,296.

Of that total in terms of religion:

• 245,419 (43.5%) were Protestant;
• 245,070 (43.4%) were Roman Catholic
• 73,807 (13.1%) were Non-Determined.

In terms of gender:

• Women made up (52.4%) a slight drop by 0.5% from the previous year (52.94%).

ECNI commented that one of the most noticeable trends is the increasing number of non-determined employees. This is a feature we have also experienced in our membership bases with more employees refusing or unwilling to identify as Protestant or Catholic.

The cause of this is varied but reflects that society is changing, so inevitably the workforce will change too.

GB GOVERNMENT REVIEW TO BOOST EMPLOYMENT PROSPECTS OF AUTISTIC PEOPLE

On 2 April 2023, the Government launched a review designed to boost the employment prospects of autistic people.

Employment rates are particularly low for people with autism, with less than three in ten in work.

The review, led by Sir Robert Buckland KC MP, will consider how the Government can work with employers to help more autistic people realise their potential and get into work. It will be supported by Autistica, a UK autism research and campaigning charity, and the Department for Work and Pensions.

The focus of the review will be on supporting employers to recruit and retain autistic people and reap the  benefits of a neurodiverse workforce.

It will consider issues including:

• how employers identify and better support autistic staff already in their workforce;
• what more could be done to prepare autistic people effectively for beginning or returning to a career; and
• working practices or initiatives to reduce stigma and improve the productivity of autistic employees.

Businesses, employment organisations, specialists support groups and people with autism will be asked to help identify the barriers to securing work, retaining work and career progression.

The review may also have wider appeal as many of the adjustments and initiatives that would benefit autistic people could also benefit those with other neurodevelopmental conditions such as ADHD, dyslexia and dyspraxia.

Recommendations for change are to be presented to Government in September 2023.

GB WHISTLEBLOWING REVIEW (3 April 2023)

On 27 March 2023, the Department for Business and Trade announced the terms of reference for a review of the whistleblowing framework in GB – the laws which support workers who blow the whistle in the workplace.

Whistleblowing refers to the disclosure of information by workers which they reasonably believe shows wrongdoing or the covering up of wrongdoing, such as health and safety breaches, criminal offences or beaches of any legal obligation.

Workers who blow the whistle are entitled to certain protections including protection from detriment or dismissal as a result of blowing the whistle.

The purpose of the review is to examine the effectiveness of the current whistleblowing framework in meeting its original objectives in enabling workers to speak up about wrongdoing and protect those who do so. The review will be used to develop and improve the existing whistleblowing framework.

Whilst we have left the EU (and no longer have to implement their Directives), it is of note that the EU Whistleblowing Directive also strengthened protections and perhaps is an influencing factor in this Review.

The EU Whistleblowing Directive allows for anonymity and requires employers with 50+ employees to have reporting procedures in place which includes providing feedback within 3 months.

The GB Review will cover:
– who is covered by whistleblowing protections;
– the availability of information and guidance provided by employers and government; and
– how employers and prescribed persons respond to whistleblowing disclosures, including best practice.

It is expected that the research stage will be concluded by Autumn 2023 and earliest implementation will probably be 2024.

Since 1 October 2017, NI whistleblowing laws have been on par with GB and this review could well shape any changes here.

Our HR Skills Masterclass has become one of our most popular courses with excellent delegate feedback reflecting the relevant and highly practical nature of the content.

We are therefore pleased to be offering a further opportunity to attend our Masterclass on 28 & 29 June 2023.

This course is designed for both recently qualified HR personnel and more experienced HR professionals who want to re-visit the fundamentals of the role

Full details of the course and booking information is attached

HR Skills Masterclass June 2023

ANNUAL INCREASE OF LIMITS

The Employment Rights (Increase of Limits) Order (Northern Ireland) 2023 announcing the annual increase in limits was published on 24 March 2023.

The equivalent in Great Britain is the Employment Rights (Increase of Limits) Order 2023.

The Order sets out the annual increases that apply to compensation awards of the Industrial Tribunal and Fair Employment Tribunal.

The new limits will come into force in Northern Ireland (and Great Britain) from 06 April 2023.

It is important to note that there are some differences between the rates in Northern Ireland and Great Britain. For ease of reference, the new equivalent figures for Great Britain are set out in square brackets.

The increases include:

• Maximum amount of a Week’s Pay (for the purposes of calculating a redundancy payment and basic award or additional award for unfair dismissal) increases from £594 to £669 [GB: £643]

• Limit on amount of Compensatory Award for unfair dismissal increases from £94.063 to £105,915 [GB: £105,707]

• Limit on amount of Guarantee Payment for a workless day increases from £31 to £35 [GB: also £35]

The effect is that, if you are found to have dismissed unfairly (for any dismissal taking place after 06 April 2023) it will be more expensive.

National Minimum Wage and National Living Wage Rates Increases from 01 April 2023

All minimum wage rates increase on 01 April of each year. This includes all National Minimum Wage rates and the National Living Wage rate. The new National Minimum Wage (for those aged 16 to 22) and National Living Wage (for those aged 23 and over) rates apply to eligible workers in Northern Ireland from 01 April 2023.

The table below sets out the current minimum wage rates and the new rates as of April 2023:

Increases to Statutory Pay

Family Leave

Then The Social Security Benefits Up-rating Order (Northern Ireland) 2023 sets out increase that will apply to the statutory payments paid by businesses as follows.

From 2 April 2023, statutory family leave, which encompasses Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP), Shared Parental Pay (ShPP) and Statutory Parental Bereavement Pay (SPBP), the weekly rates will increase to £172.48 per week (from £156.66).

From 6 April 2023, Statutory Sick Pay will increase from £99.35 to  £109.40 effective from

The Social Security Benefits Up-rating Regulations (Northern Ireland) 2023 has now been published setting to the new rates for statutory payments that will apply from 10 April 2023. These benefits are in relation to Carer’s Allowance, universal credit.

Vento Bands Increase

There has been a sixth addendum to Presidential Guidance on Employment Tribunal awards for injury to feelings and psychiatric injury following the case of De Souza v Vinci Construction (UK) Ltd [2017] EWCA Civ 879.

This Sixth Addendum updates, but does not otherwise replace, the Presidential Guidance originally issued on 5 September 2017 and the First, Second, Third, Fourth and Fifth Addenda subsequently issued on 23 March 2018, 25 March 2019, 27 March 2020, 26 March 2021 and 28 March 2022, which remain relevant to claims presented before 6 April 2023. The Sixth Addendum takes into account changes in the RPI All Items Index released on 22 March 2023.

In respect of claims presented on or after 6 April 2023, the “Vento bands” shall be as follows:

• Lower band of £1,100 to £11,200 (less serious cases)
• Middle band of £11,200 to £33,700 (cases that do not merit an award in the upper band)
• Upper band of £33,700 to £56,200 (the most serious cases), with the most exceptional cases capable of exceeding £56,200.

In respect of claims presented in Scotland, the bands remain subject to paragraph 12 of the original Presidential Guidance.

If members have any queries about the increases, please do not hesitate to contact the Legal Team at info@eefni.org

MENTAL HEALTH AND THE COST-OF-LIVING CRISIS REPORT: another pandemic in the making?

The Mental Health Foundation (the MHF) has published a report on mental health and the cost-of-living crisis stating that people living in poverty or experiencing financial stress and are more likely to develop mental health problems.

The MHF attributes this to the cost-of-living crisis, poverty and financial stress which they say is likely rise over the next few years.

The MHF conducted a UK-wide survey which saw increased reports across the UK that more people are going without the basic living essentials, such as food and a warm home.

The survey also showed that many people across the UK are feeling anxious, stressed and hopeless due to their current financial situation.

In conclusion, the MHF expects that the effects of the cost-of-living crisis on public mental health will be on a scale similar to the COVID-19 pandemic.

The MHF has called on the government to take action, with the same urgency as it dealt with COVID-19, to help support people across the UK. In particular, financial support schemes that prevent people from experiencing poverty and financial stress will be critical to supporting good public mental health going forward.