Case in point: holiday pay, disability discrimination, TUPE dismissals and whistleblowing

Holiday pay

In the second of a new series of articles on important decisions from the UK and European courts and tribunals, Eleanor Gelder looks at commission payments and the calculation of holiday pay, disability discrimination and the duty to make reasonable adjustments, TUPE-related dismissals and a change in workforce location, and the scope of whistleblowing protection.

1. Review how you treat commission when calculating workers’ holiday pay

In Lock v British Gas Trading Ltd and others, the European Court of Justice (ECJ) held that a worker’s commission payments must be included in the calculation of his or her holiday pay.

The UK’s rules on the calculation of holiday pay (particularly the definition of a week’s pay) will have to be reviewed in the light of this very important ECJ decision.

One major practical difficulty will be whether or not employers will be able to prevent salespeople from timing the completion of their sales and their annual leave to maximise their holiday pay. For example, a salesperson might try to ensure that he or she takes holiday after securing a particularly big deal or after a good sales period.

Employers will have to await further clarification from either the Employment Appeal Tribunal (EAT) or the ECJ as to the calculation of holiday pay where commission is included. In the meantime, employers may wish to review their existing holiday policies.

2. Guidance on duty to make reasonable adjustments

In Griffiths v Secretary of State for Work and Pensions, the EAT held that an employer’s duty to make reasonable adjustments for a disabled person did not include disregarding the absence triggers in its attendance policy that resulted in the employer commencing formal action against the disabled person because of the level of her absence.

However, employers should exercise extreme caution before treating a disabled person’s absences in exactly the same way as a non-disabled person’s sickness absences. The claimant in this case did not claim discrimination arising from disability under s.15 of the Equality Act 2010, which states that an employer discriminates against a disabled employee if, because of something arising from his or her disability, it treats him or her unfavourably, and cannot show that the treatment is justified in the circumstances. This could cover unfavourable treatment of a disabled employee because of sickness absence arising from his or her disability.

Employers should ensure that their attendance management procedures do not discriminate against a disabled employee because of something arising from his or her disability, for example sickness absence.

3. Relocation following a TUPE transfer does not amount to a change in the workforce

In RR Donnelley Global Document Solutions Group Ltd v Besagni and others; NSL Ltd v Besagni and others, the EAT held that a requirement to work in a different location following a TUPE transfer does not amount to a change in the workforce and is not, therefore, an economical, technical or organisational reason entailing changes in the workforce within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

This case was decided under the TUPE Regulations 2006, prior to amendments made by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014, which came into force on 31 January 2014.

The decision is likely to have been different had it been decided under the amended legislation. In particular, the amending TUPE Regulations 2014 provides that the phrase “changes in the workforce” includes a change to the employee’s place of work. However, this provision may be subject to legal challenge in the future as it may arguably not comply with the Acquired Rights Directive, which is implemented in the UK via the TUPE Regulations 2006.

4. Beware of whistleblowing protection regardless of employment status

In Clyde & Co LLP and another v Bates van Winklehof, the Supreme Court held that members of limited liability partnerships are “workers” for the purposes of whistleblowing legislation.

This case should remind employers, particularly those in tightly regulated fields such as legal services or finance, that they should take concerns raised by anyone who carries out work for them seriously, even if their exact status in law is unclear.

The Supreme Court’s liberal interpretation of what constitutes a “worker” backs up Public Concern at Work’s recommendations that the definition of a “worker” be substantially widened (to include, for example, non-executive directors).

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