Holiday pay takes flight – is voluntary overtime now included in holiday pay?

In the latest instalment of the holiday pay saga, we understand that an employment tribunal has ruled that regularly worked voluntary overtime should be included in holiday pay.

Although the position in relation to compulsory non-guaranteed overtime and commission payments is now clear, thanks to the cases of Bear Scotland and Lock v British Gas(respectively), the question of voluntary overtime has been uncertain. An employment tribunal in a case called Neal v Freightliner found that voluntary overtime should be included in holiday pay, but the case was settled before it reached the Employment Appeal Tribunal. As we have previously reported, the Northern Ireland Court of Appeal decided last Summer that voluntary overtime should be included in holiday pay (Patterson v Castlereagh Borough Council) – but, although that decision was persuasive, it was not binding in our jurisdiction.

It is now being reported that another employment tribunal, in a case called White v Dudley Metropolitan Borough Council, has decided that regularly worked voluntary overtime should be included in holiday pay. The claim concerned repair and maintenance workers who were paid for a 'basic' working week but also undertook regular voluntary overtime, which was excluded from their holiday pay. We understand that the employment tribunal's focus was not so much whether holiday pay related to work employees were contractually required to carry out; but more that it felt that paid leave should put a worker in a position comparable to the one he is when he is working – so that a worker is not deterred from taking holiday.

Being an employment tribunal decision, this is not a binding authority, so another tribunal would be free to reach a different conclusion. However, given the Freightliner case, and the Irish decision and now this decision in White v Dudley MBC, the direction of travel is clear: regularly worked, voluntary overtime should probably be included in holiday pay. The thorny question will then be deciding the meaning of 'regular' in the specific circumstances of the case. In the White case it was suggested that overtime worked once a quarter was sufficient to amount to a 'regular' pattern. However, each case would need to be considered on its own facts. Please do contact me or your usual Bevan Brittan contact if you require a specific analysis in respect of your own workforce.

Industrial action reform – Trade Union Act 2016 passed

After a somewhat tortuous journey through Parliament, the Trade Union Bill has now passed and become the Trade Union Act, amending the Trade Union and Labour Relations (Consolidation) Act 1992. Implementation will take place in stages over the course of this year and 2017, although the exact implementation timetable has yet to be announced.

The key changes under the Trade Union Act ('the Act') are as follows.

  • Currently, the requirement is for 50% of those who voted in ballot to vote in favour of industrial action. Under the Act, the requirements will be more stringent: at least 50% of all eligible members must have voted, as well as over 50% of the ballot being in favour of the action.
  • For certain "important public services", including health, education, transport, border security and fire services, an additional threshold of 40% of support for industrial action from all eligible members is required (in addition to the requirement that at least 50% of eligible members must have voted).
  • Once support is in place for industrial action, the mandate for action will be limited to six months (which can be increased to nine months if the union and employer agree).
  • Picketing will be more tightly regulated, with certain provisions currently in the Code of Practice on Picketing being brought into law.
  • A clearer description of the trade dispute and the planned industrial action will be required on the ballot paper.
  • Two weeks' notice of industrial action will be required (currently the notice required is seven days). However, seven days will suffice if the union and employer agree.
  • The process for contributing to political funds will be reversed, so that new union members will have to actively 'opt in' to this rather than automatically contributing through membership fees.
  • Ministers will have a power to make regulations requiring public sector employers to publish information about the amount of time employees spend on trade union matters (known as 'facility time') and also to limit the amount of time spent by public sector employees on facility time.

What of the proposal to allow employers to use agency staff to 'backfill' workers on strike?

In a separate but related development, the government has consulted on the removal of legislation which prevents employers from using agency staff to cover workers on strike, or work normally performed by workers covering for colleagues who are on strike. The consultation closed in September 2015 but there is no further update on if, or when, this change will come into effect.

Junior doctors' contract

It has been announced that agreement has been reached on the junior doctors' contract dispute. The full contract will be published by the end of May 2016, and will be subject to referendum by BMA members which will take place between 17 June and 1 July 2016. The referendum result will be available by 6 July 2016.

It has been reported that issues resolved from the February talks, and presumed to form the basis for the revised contract, include:

  • an agreement to replace the banding system for rewarding unsocial hours with payment for all work done to support seven day service delivery
  • a series of new limits on working hours
  • the replacement of an incremental pay system with a series of nodal pay points based on attainment and responsibility rather than time served.

We are working with our NHS clients to advise on the legal and practical issues around delivery of seven-day services. Please contact Jodie SinclairAlastair Currie or Julian Hoskins if you require further advice in this regard.

Public sector exit payment reforms

The proposed reforms to curb public sector exit payments are keenly awaited, but it seems that we will have to wait a while longer before these reforms are in place.

By way of reminder, the government proposes to introduce a

  • cap on public sector exit payments, so that most departing public sector employees will be awarded no more than £95,000; and
  • a 'claw-back' mechanism, so that high-earners re-employed in the public sector within 12 months of leaving a role will have to repay a pro rata amount of any exit payment.

According to the Local Government Association, the claw-back regulations are still being worked on but are expected to be brought in by July 2016.

In addition, the government has confirmed that the regulations implementing the cap on public sector exit payments will not come into force before 1 October 2016.

The government has also consulted on other reforms to public sector exit payments, including setting a maximum tariff for calculating exit payments at three weeks' pay for each year of service, capping the maximum number of month's salary that can be used when calculating redundancy payments to up to 15 months and tapering the amount of lump sum compensation an individual is entitled to receive as they get close to the normal pension age in that employment. There is no further information on when we can expect these proposals to come into effect.

Shared parental leave – teething troubles?

Shared parental leave has been back in the media this month, with Radio 4's iPM reporting on a teacher who successfully argued that his school should pay him enhanced Shared Parental Leave (SPL) pay, in line with its policy of providing enhanced maternity pay for mothers (to listen to the full report please click here). Although this report is described as the first enhanced SPL pay 'case', it only related to arrangements negotiated by an individual employee; we are still awaiting a tribunal case on the question of equalisation of enhanced maternity pay and SPL pay. In the meantime, like the employee in the Radio 4 report, in the absence of equalised enhanced SPL pay, employees may seek to negotiate individual arrangements with their employer, arguing that male employees on SPL should be paid the same as female employees on maternity leave.

However, such a comparator exercise would be complex and it is far from clear that a direct comparison should be made between male employees on SPL and female employees on maternity leave.