Clyde & Co's UK employment team brings you CABLE, a monthly bulletin keeping you up to date with recent legal developments.

Shared parental leave

Snell v Network Rail Infrastructure Limited S/4100178/2016 - Remedy for discriminatory levels of Shared Parental Pay

Network Rail offered mothers an enhanced level of Shared Parental Pay when they took Shared Parental Leave, but only statutory pay for fathers, or partners. Mr Snell wanted to take Shared Parental Leave but argued that he should be paid at the same rate as his wife, also a Network Rail employee, who was entitled to enhanced Shared Parental Pay.

Although Mr Snell brought a claim for both direct and indirect sex discrimination, he subsequently withdrew the direct discrimination claim and Network Rail conceded the indirect sex discrimination claim. Network Rail originally tried to justify its policy on the basis that the correct comparator was a female partner, not a mother or primary carer, and that even if the policy put Mr Snell at a disadvantage, it could be objectively justified. This was because the policy was a proportionate means of achieving Network Rail's aim of recruiting and retaining women in a male dominated workforce.

The only issue before the tribunal was the level of compensation. Mr Snell was awarded future losses for the 24 weeks of Shared Parental Leave and £5,000 for injury to feelings.

Practical point

This decision highlights that Shared Parental Pay provisions should be the same for men and women, otherwise companies could face discrimination claims.

To avoid future claims, Network Rail amended their Shared Parental Pay arrangements so that anyone taking parental leave (whether that is the mother, father or the mother's partner) will only be entitled to statutory Shared Parental Pay - essentially a 'levelling down' of pay, making it less attractive for its workforce to take Shared Parental Leave.

We still await a claim in respect of whether a man in receipt of statutory Shared Parental Pay seeks to compare himself to a woman in receipt of enhanced maternity pay.

Holiday pay

British Gas Trading Ltd v Lock [2016] EWCA Civ 983 – Contractual results-based commission must be included in holiday pay

Mr Lock was a British Gas salesman, who was paid commission based on the sales he made. The commission he earned, which was not based on the amount of work that he did but on the outcome of that work, was significantly more than his basic salary. As he could not earn commission while on annual leave, in the weeks after taking holiday Mr Lock was only paid his basic pay, plus any commission he had earned in previous weeks but which happened to be paid during that time.

The Court of Appeal confirmed that contractual results-based commission and non-guaranteed overtime are still the only payments that employers must include in holiday pay.

Practical point

This decision only applies to employees who are entitled to contractual results-based commission and in respect of four weeks of annual leave - not the extra 1.6 weeks under the working time rules, or any additional contractual holiday entitlement.

The Court of Appeal's decision does not really take us much further as employers still have the same practical difficulties of how to calculate the commission element of statutory holiday pay.

Although the case touched on the question of whether annual bonus payments should be incorporated into holiday pay calculations, the Court did not comment on this. So until there is a further decision on this, annual bonus payments do not have to be included in holiday pay calculations.

TUPE

Salvation Army Trustee Company v Bahi UKEAT/0120/16 - Service provision change: assessing whether the activities were fundamentally the same before and after the transfer

A City Council which had provided a range of services to homeless people through contracts with different providers, merged the provision of homelessness and ex-offender support, and established a single point of access to replace its numerous contracts.

The Employment Appeal Tribunal (EAT) said that to assess whether the activities were fundamentally the same before and after the transfer in order for there to be a TUPE service provision change, "activities" should be defined in a common sense and pragmatic way. It should not be assessed at a level of generality that does not really describe the specific activities at all but should be holistic, having regard to the evidence in the round.

Practical point:

The EAT commented that it would be preferable to have some form of speedy dispute resolution in TUPE disputes, such as a "fast track" in the tribunal. It will be interesting to see whether anything comes of this suggestion, to reduce the time and costs involved in TUPE claims.

Equal Pay

Brierley and others v Asda Stores Ltd - Comparators in equal pay claims

A group of mainly female employees who work in jobs in Asda stores brought equal pay claims, arguing that they were entitled to equal pay with Asda's distribution depot employees, who are mainly men (the comparators). At a preliminary hearing, an employment tribunal had to consider whether the store employees could rely on this comparison. The employees had to show that they and the comparators are both employed by the same employer and although they work at different establishments, ‘common terms apply at the establishments’ either generally or as between the employees and comparators.

The tribunal found that Asda's Executive Board had exercised budgetary control over the Retail and Distribution operations and so had the power to introduce pay equality. It also accepted the store employees’ argument that their terms were broadly similar to those of the depot employees: they were all hourly paid, the structure of the terms in their respective staff handbooks was broadly the same and the differences in specific terms were not extensive.

Corporate governance

The Business, Innovation and Skills Committee launched an inquiry on corporate governance last month, focusing on executive pay, directors' duties, how to increase the number of women in executive positions on boards, and worker representation on boards and on remuneration committees

Equalities legislation and policy

The Women and Equalities Select Committee has launched an inquiry to examine the implications of leaving the EU on equalities legislation and policy in the UK.