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Thursday 16 March 2017

Employment Law Bulletin March 2017

New Trade Union Act

The major provisions of the Trade Union Act 2016 came into force on 1 March, 2017. This means that from now on industrial action ballots will only be lawful if at least 50 per cent of those being balloted cast a vote. Where the majority of those being balloted are engaged in ‘important public services’ then there is an additional requirement that at least 40 per cent of those entitled to vote, vote ‘yes’. That means that if there are 100 union members (let’s keep the maths simple), then a 26-25 vote in favour of industrial action will be sufficient in most cases but a 40-10 vote (or better) will be needed in cases involving those key services.

Tuesday 31 January 2017

Employment Law Bulletin January 2017

Is Work-Related Stress a Disability?

Stress is one of the most common cause of absence for workers and stress-related employee illness is a very significant issue for many employers.  But does “stress” count as a disability for the purposes of the discrimination legislation?

As the recent case of Herry v Dudley Metropolitan Borough Council illustrated, the answer is “not necessarily”.

Mr Herry brought a large number of allegations of race and disability discrimination against his employer. He claimed two disabilities: dyslexia and stress – conditions that many employers will recognise as being both common and difficult to assess in practice. The employment tribunal dismissed the claims and imposed a heavy costs award against Mr Herry as he had repeatedly been warned that his claim had no reasonable prospect of success.  The disability discrimination claims were rejected as he had failed to show that either his dyslexia or his stress had “a substantial adverse effect on his ability to carry out day-to-day activities” – this is one of the key requirements for a condition to qualify as a disability under the relevant legislation.

Mr Herry appealed – unsuccessfully – to the Employment Appeal Tribunal (EAT).  The EAT noted that the Mr Herry’s stress was “very largely the result of unhappiness about what he perceived to be unfair treatment of him” rather than an illness that would qualify as a disability. It also said that “unhappiness with a decision or a colleague, or a tendency to nurse grievances or a refusal to compromise, are not of themselves mental impairments”.

Tuesday 22 November 2016

Employment Law Bulletin November 2016

Rocky Times Ahead For The Gig Economy?

There has been a lot of attention in the media recently about the so-called gig economy, that is, the method of working in which temporary positions are common and organisations contract with independent workers for short-term engagements, as opposed to the traditional employment model. Two recent news items have highlighted the considerable unrest and legal uncertainty in this sector.

App-based taxi provider Uber hit the headlines at the end of October when an employment tribunal held that two of its drivers were not self-employed contractors as Uber claimed, but were ‘workers’. This meant they are entitled to the national minimum wage, paid annual leave and whistleblower protection. Uber’s arguments that it is merely a technology platform as opposed to a transport provider and that its drivers are self-employed contractors offering their services to passengers via the Uber app were rejected comprehensively.

Tuesday 25 October 2016

Employment Law Bulletin October 2016

Welcome to the latest MH employment bulletin. In a change to the proceedings, this week we focus on one case, dealing with the vexed issue of holiday pay…

Holiday Pay Must Include Commission

Those of you who keep an eye on developments in employment law will be all too aware of the long-running saga of how to calculate holiday pay.

The Court of Appeal’s decision in British Gas Trading Ltd v Lock and anor gives some clarity, but it is not welcome news for employers.

Under the Working Time Regulations 1998 (WTR), where an employee has “normal working hours” and their remuneration varies with the amount of work done, holiday pay is calculated using an average of remuneration over the previous 12 weeks. Previously it was understood that commission is not included in this calculation, since it does not vary with the amount of work done, but rather the success of the work.

This interpretation has now been found to be inconsistent with the EU Working Time Directive, with the European Court of Justice saying the holiday pay should reflect “normal remuneration” which would include commission.

Mr Lock was an energy trader for whom commission represented a very substantial part of his earnings – about 60% of his basic pay. When he went took holiday, he continued to receive his basic pay and commission based on his earlier sales. However, since he had not been generating sales while on holiday, his commission payments were lower during the period that following the holiday.  So, should his holiday pay reflect that he usually earns commission?

Eventually, after going up to the European Court of Justice and back, the Court of Appeal has said that yes it should. In short, when calculating the basic four weeks’ annual leave under the WTR, results-based commission payments can and should be included in the calculation.

The manner of the decision is controversial, since it involved not so much “interpreting” the UK legislation as effectively rewriting it – inserting an entirely new provision so as to make the WTR consistent with the Working Time Directive.

The outcome may seem sensible at first glance – so that holiday pay reflects “normal” pay. However, it does lead to the odd concept of receiving commission in respect of sales that the employee did not actually complete (and indeed, did not occur) and could create significant extra cost for the employer.

The Court of Appeal did leave some other loose ends – for example, it remains unclear whether this would apply to, say, an employee who receives a results-based annual bonus, or a “worker” who receives commission only when a particular level of turnover or profit is achieved. The uncertainty in this area is therefore likely to continue for some time.  For now, though, if you have workers who receive commission, you should be revisiting your holiday pay policy to check that it is compliant.

If you have any concerns regarding holiday pay, do contact us.

MH Contact Bob Cordan

Wednesday 28 September 2016

Employment Law Bulletin September 2016


Well, that was an uneventful summer wasn’t it? We’re back for another round-up of employment cases and I promise not to mention Brexit at all (apart from then).

There has been a rash of discrimination cases recently so this month’s bulletin is something of a discrimination special. If you like this (albeit accidental) themed approach, let us know, and we might make it a regular thing…

Maintaining pay after a reasonable adjustment

Employers are required by the Equality Act 2010 to make “reasonable adjustments” to assist disabled employees in certain circumstances. One common reasonable adjustment is the provision of alternative work. The disabled employee may no longer be able to do ‘job A’, but if he or she is capable of doing ‘job B’ then offering that alternative work might well be a reasonable adjustment. But what if ‘job B’ is paid at a lower rate? Does the employer have to continue paying the higher salary?

Proving Discrimination

One of the greatest obstacles facing anyone claiming discrimination is that very few employers are prepared to state their prejudices openly – making direct evidence of discrimination very difficult to come by. The Equality Act attempts to redress the balance by switching the burden of proof onto the employer if the employee can put forward enough evidence to support the inference that discrimination may have occurred. This means that an employer will sometimes have to prove that it is innocent of discrimination – provided that there is enough evidence to suggest that it might be guilty.

Indirect Discrimination

Claims for indirect discrimination often involve a request for flexible working to allow the employee to balance work and family life. Statistically, women are overwhelmingly more likely to want to adjust their working hours in order to accommodate their caring responsibilities than men, so any refusal of a flexible working request opens up a potential indirect discrimination claim. In technical terms the employer is applying a ‘provision criterion or practice’, which places women at a particular disadvantage. What the tribunal has to decide is whether the employer’s refusal of the request is a ‘proportionate means of achieving a legitimate aim’. In many workplaces employers themselves see the benefit of flexible working arrangements. But there remain many roles where accommodating the needs of individual employees can be difficult.

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