Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
August 2011

Welcome to the (late) August edition of the Canter Levin & Berg Employment Solutions newsletter.

August is traditionally a quiet month for employment law with the higher courts not sitting. However, we've gathered a number of news items which we hope are of interest to you.

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Martin Malone

This month's news:

1. comparison of public and private sector pay

There has been a good deal of media coverage concerning the threat of public sector industrial action over pay. In this context, a new report by the Office for National Statistics provides an interesting contribution to the debate.

In July, the ONS published a report attempting to compare public and private sector pay ("Estimating Differences in Private and Public Sector Pay"). It uses data collected for the Annual Survey of Hours and Earnings (ASHE) and the Labour Force Survey. The ONS estimates that the difference by which public sector employees' remuneration exceeded that of private sector employees increased between April 2007 and April 2010 by almost 50%. In April 2007, the estimate was that public sector employees earned 5.3% more than private sector employees. The equivalent figure for April 2010 was 7.8%. For consistency over time, the ONS estimates assumed that employees of those banks reclassified to the public sector in 2008 were in the private sector throughout.

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2. carrying forward untaken holiday entitlement

As is well known, the general rule is that employees must either take their full holiday entitlement during the holiday year in which it accrues or else forfeit the right to any holiday not so taken. Under the Working Time Regulations 1998, a worker has no right to carry untaken holiday forward to the next year; nor can a worker in that position claim pay in lieu either, unless his employment has ended.

However, there is an important exception to these general rules. Within the last few years European case law has established that if a worker is unable to take annual leave because of long-term sickness absence, he or she accumulates the right to take that leave on returning to work (or pay in lieu if their employment is terminated) - even if that return is not until the next leave year.

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3. religious discrimination

It seems that the Equality and Human Rights Commission agrees with the many Christians who believe that courts and tribunals "have interpreted the law too narrowly in religion or belief discrimination claims".

In a Press Release issued on 11 July 2011 the Commission says that it is concerned that "rulings already made by UK and European courts have created a body of confusing and contradictory case law. For example, some Christians wanting to display religious symbols in the workplace have lost their legal claim so are not allowed to wear a cross, while others have been allowed to after reaching a compromise with their employer". The Commission is at pains to point out that it is not supporting only Christians in this context - one example it gives is that of a Jew who asks not to have to work on a Saturday for religious reasons.

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4. red tape and gold plate

The government is pushing forward with its plans to reduce red-tape, recently inviting businesses and individuals to become more involved in its "Red Tape Challenge" by completing a series of questions about the enforcement of rules and regulations. A "Red Tape Challenge Enforcement" website has been set up at until 31 August 2011.

The Health & Safety Executive appears to be following a similar "customer friendly theme".

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5. TUPE and fact dependant appeals

An interesting "TUPE question" came before the EAT in July. The case is Nottinghamshire Healthcare NHS Trust v (1) Hamshaw & Ors (2) Perthyn (3) Choice Support, EAT on 19 July 2011.

Hillside House was a care home in Bassetlaw run by Nottinghamshire Healthcare NHS Trust. The seven residents were supported by healthcare assistants, who in turn were managed and supervised by qualified nursing staff. Residents were monitored and managed on a 24 hour basis with active night staff. All the staff, 18 in total, were employed by the Trust.

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6. employee or self-employed?

Many employment law rights (such as unfair dismissal and statutory redundancy pay) are restricted to "employees" as defined. It is usually obvious whether a person has a contract of employment (i.e. a contract of service between an employer and an employee) or a contract for services (i.e. made by an employer with an independent contractor/self-employed person). Perhaps a simple and straightforward example of the difference is the contrast between the jobs of chauffeur and taxi-driver.

In some ways, the debate over whether someone is an employee (or worker) or self-employed has perhaps become something of an "old chestnut". Yet no matter how many cases give guidance on how to approach the question, grey areas remain. One such common grey area has been the extent to which any written contract should provide the answer. Many outside the law would be surprised to learn that the contract is, in itself, by no means determinative.

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7. pay cuts and dismissal

In the current economic climate, it is an unfortunate fact of life that employees are facing numerous constraints concerning pay and benefits. Pay freezes are commonplace and several councils have made the news by requiring employees to accept pay cuts or face dismissal. As a general principle, the unilateral imposition of material contract variations which are detrimental to employees can entitle the affected employees to resign and claim breach of contract and constructive unfair dismissal.

In a decision which will be welcomed by employers, the EAT has recently clarified that when deciding whether or not dismissal of an employee for refusing to accept a pay cut does constitute "unfair dismissal", the question to be considered is NOT the reasonableness of the stance adopted by the employee. Rather it is whether the employer acted reasonably in dismissing the employee for refusing to do so.

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8. compromise agreements and Andy Coulson

Compromise agreements made the BBC News at Ten on 22 August with Robert Peston's report that Andy Coulson received "hundreds of thousands" from News International while working as press officer for Prime Minister David Cameron.

The function of a compromise agreement is to prevent an employee who might bring a claim against his or her former employer from doing so. It's an essential element of such an agreement that the terms remain confidential between the parties. Any properly drawn compromise agreement will ensure this. The idea is that a payment is made which represents a fair settlement without the need for the issues to be played out in public tribunal proceedings. However, if those issues are not subject to judicial scrutiny and the fact of the payment is disclosed, it's easy for people to take the view that the employer is acknowledging wrongdoing by making the payment. Often that is not the case.

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