Welcome to our summer newsletter

It’s been a typical British summer so far, but we hope you’ve been enjoying the sun on the odd occasions that it’s shown its face!

The last few months have seen quite a few interesting developments in the world of employment law – from consultations on strike ballot reform and the gender pay gap to court rulings on untaken paid holiday and work/rest time for field-based staff. You’ll find some of the key news and updates summarised in our newsletter below.

Unused holiday for staff on sick leave

The Employment Appeal Tribunal (EAT) has recently ruled that, where an employee has been unable (or unwilling) to take their annual holiday entitlement due to sickness, the unused annual leave can be carried forward for a maximum of 18 months. The case involved a worker who was employed until February 2014, but had been off sick since April 2010. During this time, the employee didn’t ask for or take any annual leave until July 2013, when he asked if he could take all the unused holiday dating back to 2010. The company agreed to give him paid holiday for 2013/14, but not for the two previous years. But when the employee left the company, he then asked for payment in lieu for these years. The employer refused and the case went to tribunal, which ruled in the employer’s favour on the grounds that there was insufficient medical evidence for the worker to be unable to take his annual leave. However, when the employee appealed the EAT ruled that there is no actual requirement for an employee on sick leave to show that they can’t take paid holiday due to a medical condition. The EAT also ruled that, whilst the worker was entitled to carry over any unused holiday whilst on sick leave, an 18 month limit should apply. So the employee was entitled to request payment in lieu of holiday for the 2012/13 year, but not for any earlier period.

Strike ballot reform

The Government has launched a consultation with the aim of reforming strike balloting laws. A draft Trade Union Bill has been produced, supported by three consultation documents.

These contain a number of controversial proposals, including:

• Any strike action must have at least a 50% turnout
• Important public services can only strike if at least 40% of the eligible workforce votes in favour
• Companies can hire temps to take over the work normally done by striking staff
• Changing the rules around picketing to tackle the intimidation of non-striking workers
• Increasing the notice period for industrial action from 7 to 14 days
• Limiting strike mandates to four months, so that a further ballot is then required.

The consultation period will run until 9 September 2015.

Tax changes to termination payments?

A Government consultation could change the way termination payments are taxed in the future. At the moment, no tax or National Insurance is payable on the first £30,000 of non-contractual termination payments. However, the Government is considering changing the rules so that contractual payments (such as payment in lieu of notice) and non-contractual payments are treated the same. Another proposal is to link the tax-free element of a termination payment to length of service. For example, to allow a £6,000 tax-free payment after two years’ service and then increase this by £1,000 for every additional year of service. This would result in most workers qualifying for much smaller tax-free sums than at present. The consultation runs until 16 October 2015 and you can find out more here.

Early Conciliation update

Acas has published statistics from the first year of its Early Conciliation (EC) initiative, which looks to have had a positive start. 75% of companies and staff agreed to give EC a try during its first 12 months, with Acas handling around 83,000 cases during this time. During the first six months of the scheme (April to December 2014), 63% of EC cases avoided going to tribunal, with another 15% progressing to formal COT3 settlement. Of the 22% of cases that went to tribunal, 51% ended up being settled with a COT3 agreement. You can read the full Acas report here.

Closing the gender pay gap

The Government is consulting on how new requirements for companies to provide information about the gender pay gap will work. The new legislation, which falls under section 78 of the Equality Act 2010, is likely to apply to all voluntary and private sector businesses in Great Britain who employ more than 250 staff.

The consultation paper, entitled Closing the gender pay gap, has two key focus areas: how often employers should publish gender pay gap information, and the level of detail that will be required.

For example, could companies simply state the overall difference in average pay levels between male and female workers as a percentage of male earnings? Or should the information be split out by full/part time earners, salary grades or role types?

The consultation, which closes on 6 September 2015, is also considering whether companies should explain any gender pay gaps within their businesses and how these will be addressed.

Working time headache

The Advocate General (AG) for the European Court of Justice has given an opinion that the time spent by field-based workers travelling to and from their first and last appointments of the day should be considered as ‘working time’.

The case involves a group of Spanish workers who work remotely and drive a company car to and from all their appointments. The group is challenging their employer’s current policy of regarding the working day as starting when they arrive at their first appointment and ending when they leave their last customer to go home.

In giving their opinion, the AG had to consider whether or not this travel time should be classed as ‘working time’ or ‘rest’ within the remit of the EU Working Time Directive.

You can read more here.

Tribunal and court fees scrutinised

The Commons Justice Select Committee has launched an inquiry into the court and tribunal fees which were brought in by the Coalition Government to reduce the financial burden of court costs to the taxpayer. The Committee’s investigation will focus on how introducing these fees has affected access to justice, and will consider the impact of charges levied for employment tribunals, civil court cases and criminal hearings. Meanwhile, a separate Ministry of Justice review is specifically looking at whether employment tribunal fees have been successful in transferring costs from the public purse to users of the tribunal system.