News, Legislation & Future Developments
Annual compensation limit increases – On 1 February 2012,
the new maximum compensatory award for unfair dismissal
increased from £68,400 to £72,300. The new maximum for a
week’s pay for the purposes of a statutory redundancy payment
increased from £400 to £430.
New rates of statutory maternity pay and sick pay
announced – The Minister of State for Work and Pensions has
announced that statutory maternity, paternity and adoption pay
will increase from £128.73 to £135.45 per week and statutory
sick pay will increase from £81.60 to £85.85 per week. The new
rates are expected to come into force on 9 April 2012.
Tribunal fees – The Ministry of Justice has launched its
consultation, seeking views on two different fee charging
structures which might be adopted for charging fees in the
employment tribunal. Option 1 proposes charging a fee upon
issuing a claim and a further fee just before the hearing of that
claim. The amount charged would depend on the nature of the
claim. Option 2 proposes only an issue fee, the amount of which
will depend on what the Claimant states their claim to be worth:
an individual unfair dismissal worth less that £30,000 would cost
£500 to issue, one worth in excess of £30,000 would cost
£1,750.
New Law
Religion or Belief Discrimination – An employment tribunal
has held that a belief that people should pay their respects by
wearing a poppy from All Souls’ Day on 2 November to
Remembrance Sunday is not a philosophical belief capable of
protection under the Equality Act 2010. The Claimant, an exserviceman, submitted an employment tribunal claim for religion
or belief discrimination on the basis that his employer would not
allow him to wear a poppy at work. However, the tribunal judge
found that, however admirable the Claimant’s belief, it lacked the
required characteristics of cogency, cohesion and importance
and cannot fairly be described as relating to a weighty and
substantial aspect of human life and behaviour.
Lisk v Shield Guardian Co Ltd and others ET/3300873/11
Varying Terms and Conditions – The EAT has held that,
where an employer offers an incentive to employees to secure
agreement to variation of their contracts, it is reasonable not to
offer that benefit as part of an offer of re-engagement following
dismissal for failure to agree. The Claimant was one of 470
employees entitled to a contractual bonus. The employer ran
into financial difficulties and so attempted to negotiate with the
employees the removal of the bonus term. The employer’s final
offer to secure the employees’ agreement included a lump sum,
to “buy out” the bonus entitlement. The employees rejected this
offer and so they were all dismissed and re-engaged on new
terms that did not include the bonus or the buy-out sum
previously offered as an incentive. The Claimant claimed unfair
dismissal on the basis that a fair dismissal would have included
the buy-out sum. However, the EAT held that the dismissal was
fair as there was no obligation on the Company, as a reasonable
employer, to include the buy-out sum in the offer of reengagement.
Slade and Others v TNT (UK) Limited EAT/0113/11
Action Points
Employers should make a note of these new limits, especially
when calculating statutory redundancy payments.
Employers should be aware of these increased rates and, if
appropriate, amend their maternity and paternity policies
accordingly.
As noted in our December 2011 Refresher, this proposal may
act as a disincentive to vexatious litigants. However, it remains
to be seen whether the proposed fee levels are sufficiently high
to dissuade those employees who are intent on putting their exemployers to the cost and time of litigation.
Employers wishing to participate in the consultation should
contact James Williams at Archon who will coordinate a
submission to the Ministry of Justice.
Action Points
Previous Tribunal decisions have confirmed that views as
diverse as a support for fox hunting and a belief in the higher
purpose of public service broadcasting were capable of
protection under discrimination law, suggesting that the
definition of ‘philosophical belief’ should be interpreted quite
widely. However, this case seems to reign in the definition.
It nevertheless remains very difficult for employers and
employees to be certain as to what might constitute a
‘philosophical belief’, Employers should therefore still be mindful
of the fact that an employee holding a cogent and cohesive view
on a matter relating to a weighty and substantial aspect of
human life may be considered to have a philosophical or other
belief, entitling them to the protection of discrimination
legislation.
The case offers a useful reminder that employers who wish to
vary employees’ terms and conditions of employment can, if
necessary, force through such changes in the face of
employees’ objections by dismissing them and offering to reengage them on the varied terms and conditions. In such
circumstances, provided that the variation is justified for
legitimate business reasons and the employer follows a fair and
thorough consultation process, the dismissals should be
considered fair.
One of the steps that employers may consider as part of the predismissal consultation process is offering an incentive to the
employees to secure their agreement.
The decision in this case makes it clear that, where an employer
has offered such an incentive, but the employees have failed to
agree to the variation, the employer does not need to include
that incentive in the offer of re-engagement following the
dismissals.
Nevertheless, it would be prudent for employers to make it clear
Sick Leave – The EAT has held that an employee on long-term
sick leave should have requested annual leave in accordance
with the Working Time Regulations 1998 in order to be entitled
to receive payment in lieu of it at the end of her employment.
The Claimant went on sick leave in November 2005 and did not
return to work before her dismissal in October 2008. After the
termination of her employment, the employer paid the Claimant
in lieu of her final leave year’s statutory holiday entitlement, but it
did not make a payment in lieu of her untaken holiday
entitlement for the previous two leave years. The EAT held that
workers should not receive statutory holiday pay in
circumstances where they have not taken holiday as, if they did,
they might effectively receive double payment for a period of
work. It would also create an incentive on the part of workers
not to take holiday. The EAT stated that the rule of ‘use it or
lose it’ applied here – meaning that the employee’s failure in
asserting her right to leave by putting in a request for it meant
that the right expired at the end of each leave year.
Fraser v Southwest London St George’s Mental Health Trust
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in these circumstances that any incentive will not form part of
any re-engagement offer, so that there is no ambiguity over this
issue.
This is the latest decision to deal with the accrual of holiday
during periods of sick leave. The decision is broadly helpful to
employers in confirming that an employee on long-term sick
leave who has not provided notice of intention to take his or her
statutory holiday will not be entitled to be paid for that untaken
holiday, accrued in previous holiday years, on termination.
However, the decision does create some potential problems for
employers as it may encourage workers to take ‘holiday’ during
periods of sick leave in order not to lose their entitlement. The
question may therefore arise as to whether such holiday breaks
the period of sick leave, which may have implications in relation
to an individual’s entitlement to sick pay.
This decision also directly conflicts with another EAT decision,
which held that there is no requirement for an employee to have
requested holiday to be entitled to be paid for it upon
termination. This conflicting case is currently being appealed
and so, in the meantime, employers should carefully weigh up
the potential risks of not paying in lieu of holiday accrued in a
previous holiday year on termination of employment.