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Employment Law Case Update - March 2016

Employment law solicitor Natalie Ruane provides a summary of the latest employment law cases including employment tribunal fees and holiday pay.

Employment Tribunal fees – Unison granted permission to appeal

R (UNISON) v Lord Chancellor

The public sector union UNISON applied for judicial review on the grounds that the introduction of Employment Tribunal fees breached the EU principle of effectiveness and equivalence and the public sector equality duty and amounted to indirect discrimination. The application was unsuccessful and UNISON appealed to the High Court, where the appeal was dismissed. On 26 February 2016, it was announced that Unison has been granted permission to appeal to the Supreme Court. Although unlikely, if the appeal is successful and fees abolished, this could prompt an increase in claims against employers.

Uplift in compensation for injury to feelings

Sash Window Workshop Ltd and another v King

Pereira de Souza v Vinci Construction UK Ltd

The above cases are currently on appeal to the Court of Appeal with regard to whether a 10% uplift should be applied to awards in the employment tribunal for injury to feelings or personal injury, based on the decision in Simmons v Castle. If so, this would increase the highest current Vento band used for assessing compensation to a new range of £19,800 to £33,000.  As injury to feelings is awarded for discrimination cases, the maximum compensation award is still unlimited.

Holiday pay

Lock v British Gas Trading Ltd – holiday pay to include commission-based payments

Fulton and another v Bear Scotland Ltd – decision to exclude overtime from holiday pay to be appealed

The decision in the Lock case confirmed that holiday pay (in respect of the minimum four weeks' statutory annual leave required by the Working Time Directive -WTD) should include sales-related commission and similar payments. On 22 February 2016, the Employment Appeals Tribunal (EAT) dismissed British Gas’s appeal. The EAT held that the WTD can be interpreted to provide that results-based commission should be included in statutory holiday pay.

The decision in the Bear Scotland case deals with whether holiday pay should include overtime pay (in respect of the minimum four weeks' statutory annual leave required by the WTD). In August 2015, Bear Scotland, which was remitted by the EAT in its November 2014 decision, returned to the employment tribunal to consider the claimants' individual circumstances. The tribunal dismissed the claims. However, after the EAT released the Lock decision on 22 February 2016 which included commission in holiday pay, the Claimants in the Bear Scotland case were granted the right to appeal to the Court of Appeal, as confirmed on 26 February 2016. The decision on whether holiday pay should be based on overtime as well as basic salary therefore remains to be decided. If it follows the logic of the Lock case, we would expect the appeal to be successful.

The potential increase in holiday pay to include average overtime and commission means an extra expense for employers. Our advice to employers will be to consider this when deciding to pay overtime and commission, as this could result in a significant uplift on holiday pay for staff.

About the author

Natalie Ruane profile photo

Natalie Ruane

Natalie is a Partner and leads the Employment Law & HR team and specialises in education.

Published: Friday 18th March 2016
Categorised: Employment

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