Employment Law: a roundup of the most significant changes in 2014

Debbie-Haskell-150x150Enforced subject access requests
On the 1st of December 2014 the government implemented section 56 of the Data Protection Act. This now makes it a criminal offence for a party to require another individual to make a personal subject access request with a view to that party then viewing it – which is often referred to by many as an enforced subject access request. Employers can still request a criminal record check from the Disclosure and Barring Service where the role they are recruiting for concerns work with vulnerable adults, children or is exempt under the Rehabilitation of Offenders Act 1975.

The scope of this new section is wide reaching; it not only prevents employers from making job offers conditional upon the disclosure of criminal convictions, but also prevents the provider or supplier of a service from imposing the same condition. The ICO has offered some very useful examples in their guide on the subject.

Non–compliance could lead to a prosecution by the Information Commissioners Office which has indicated that it will adopt a vigorous approach. In England, Wales and Northern Ireland this may mean a fine of up to £5000 in the Magistrate’s court or an unlimited fine in the Crown Court. In Scotland an offender may face either a £10,000 fine through the Sheriffs Office or an unlimited fine under the Solemn Procedure.

Holiday Pay
What is meant by ‘holiday pay’ has come under scrutiny in the employment tribunals over the past year. The key decisions which employers will be interested in are:

Commission: Holiday pay will include an employees commission where this is inherently linked to the performance of their duties; Lock v British Gas Trading Ltd. In this case, 60% of the employee’s wages came from commissions derived from sales leads. He took three weeks off at Christmas and as a consequence his wages in January dropped significantly because his holiday absence meant that he was not at work to create these leads. His argument that this was a deterrent to employees taking annual leave was successful and went all the way to European Court of Justice (ECJ). The employment tribunal started hearing submissions in October 2014 on how to apply the EAT ruling and some of the matters to be considered are whether it applies to the directives 4 weeks annual leave, or to the UK’s 5.6 weeks.

Overtime: Holiday Pay includes non-guaranteed and/or compulsory overtime, however, the employee is restricted on how long they can backdate their claim. Claims can be made if there has either been a non payment within the last three months or, where there has been a continuous series of non payments, and if the claim was brought within three months of the last non-payment, then the claim can be backdated to beginning of when this started; Fulton and others v Bear Scotland Ltd

In response to the decision in Fulton and others v Bear Scotland Ltd, the government has swiftly introduced the Deduction from Wages (Limitation) Regulations 2014. They do two things:-

(1) Limit all unlawful deduction claims to two years before the date the ET1 is lodged (certain wages are excluded from the order)

(2) Explicitly states that the right to paid holiday is not incorporated as a term in employment contracts.

This effectively prevents an employee from bringing a deduction from wages claim going back further than years permitted under the Fulton decision, in either the tribunal or county court. It doesn’t come into effect immediately though and employees have until the 30th of June to make any claim.

Contractual pay in lieu of holiday: Whilst this may appear obvious, when an employer offers an employee a benefit under their contract of employment to pay in lieu, if or when they leave the business, then they will be bound to those restrictions; Beijing Ton Ren Tang (UK) Ltd (BTRT) v Wang. In this particular case the employer agreed that any untaken annual leave would be paid in lieu if/when the employee left the business. After her dismissal, it came to light that 131 days had accrued over seven years amounting to £25,000.00. In attempting to restrict the annual leave bill to the employees last year of employment, the employer unsuccessfully tried to argue that as this contractual term did not comply with the Working Time Regulations, it was therefore unenforceable; clearly the tribunal disagreed with this.

Shared parental leave
Parents of babies due to be born or adopted after 5th April 2015 are now entitled to elect to share the parental leave and employers could expect to receive their first requests in January or February. The basics of this entitlement are:

• Subject to certain eligibility criteria, parents can choose to share the care of their child
• The leave must be taken within a year of the child’s birth
• The mother must first elect to reduce her maternity or adoption leave
• A notice of entitlement to shared parental leave must be given at least 8 weeks before the employee intends to take the shared parental leave
• An employee can make up to three requests for shared parental leave.
• Requests reflecting a week’s leave must be granted but occasional days only need to be considered by the employer.

This will not replace the current family friendly provisions and the government has made it clear that its intention is to offer parents flexibility in their child first year. It is for the parents to assess what is the best option for them but employers need to familiarise themselves with the legislation to ensure that they are prepared for possible applications.

National minimum wage and sleep in
Where an employee is required to undertake a number of “sleep- over” night shifts at work as part of their duties, they are entitled to receive minimum wage for this time regardless of whether they are performing work duties or merely sleeping on the premises; Esparon (t/a Middle West Residential Care Home) v Slavikovska. The key issue in this case was that the employer had a legal obligation to ensure that they had a member of staff with a certain level of qualification, on their premises at all times. The Employment Appeal tribunal decided that she was being paid to satisfy that legal obligation and as such the night shifts formed part of her working time. For business’s that do not have such a restriction or requirement, but prefer to have staff on site, there is still scope to argue that their overnight shifts are not affected by this decision.

Post restrictive covenants
Usually where a post restrictive covenant is ambiguously worded the courts have interpreted it to reflect the intentions of the parties concerned. However a clear warning was given to employers that where a clause is clearly and unambiguously worded but did not actually protect the employer as intended, then the court cannot apply this liberal approach. In Prophet Plc v Huggett the employer’s covenant was effectively ruled as toothless by the Appeal Court; on its literal interpretation the clause prevented Mr Prophet from working with a competitor on products he was involved with whilst working for Prophet Plc but as these products were wholly unique to Prophet Plc he was free to work for a competitor.

The court has also ruled that where an employee has left their employment without giving their contractual notice, refusing to ever return, then the employer can still keep that contract and its post restrictive covenants ‘alive’ whilst refusing to pay the employee’s wages until they agree to return to work. In Sunrise Brokers LLP v Rodgers, Mr Rogers attempted to leave his contract early and work for a competitor in the US. This proved unsuccessful and he was, in effect, prevented from forcing his employer to place him on garden leave for the duration of his notice and was restrained from dealing with the competitor for a total of 10 months.

Take a look at our Employment Law Centre for more information about employee rights and obligations