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• Employment Update - July 2007

Changes to Statutory Holiday Entitlements for All Workers

The draft Working Time (Amendment) Regulations 2007, which increase the statutory paid holiday rights of all employees, have now been published. They are due to come into effect on 1 st October 2007.

The Main Change

In accordance with the Government's manifesto commitment that workers would receive paid time off for public holidays in addition to their existing rights to four weeks' holiday, the 2007 Regulations amend the Working Time Regulations 1998 to increase the annual leave entitlement for full-time workers from four weeks to 5.6 weeks, giving those workers who work five-day weeks the right to an additional eight days' paid leave a year.

This essentially means that employers will no longer be able to include the eight UK Bank Holidays within the 20 days' paid leave that they must currently provide.

This will be pro-rated for part-time employees.

How the Changes will Work

Under the new rules:

• Workers will become entitled to an additional four days' paid holiday per year from 1 October 2007;

• Workers will become entitled to a further four days' paid holiday from 1 April 2009, taking them up to 28 days in total;

• The maximum statutory holiday entitlement is capped at 28 days, although employers may of course give more contractual holiday than that;

• Payment in lieu of the initial additional four days' paid holiday will not be allowed after the initial transitional phase ends on 1 April 2009; and

• An "appropriate agreement" (such as an Employment Contract) may provide that the additional leave entitlement may be carried over into the next holiday year;

What if I already give my employees 28 days' paid leave (including Bank Holidays)?

These new rules will not apply where employers already meet the full requirements of the regulations as at 1 st October 2007 - ie where they already give the equivalent of 28 days' paid holiday (without payment in lieu, except on termination), and their workers can carry untaken days over for no more than one year - and will continue to do so.

When do the additional days need to be taken?

Although the additional eight days are designed to ensure that workers receive paid time off for public holidays in addition to their right to four weeks' holiday under the Working Time Regulations 1998, there is no obligation to allow workers to take these additional days on the public holidays.

This means that employers can still include Bank and Public Holidays within the total of 28 days which they must provide, or (where more appropriate to their particular business needs), can require employees to work the Bank and Public Holidays and take the additional eight days leave at another time.

It should be noted that, although the new regulations will apply in Scotland, where they have nine public holidays, there will still only be an entitlement to eight additional days' leave.

What effect will these new rules have on my Contracts of Employment?

Employers will have until 1 st October 2007 to decide whether to bring themselves within the scope of the exception (see above).

Specific terms within their contracts of employment may need to be addressed. For example, employers who currently state that employees are entitled to statutory and bank/public holidays in addition to their basic 20 days may need to amend their Contracts to ensure, where appropriate, that it is clear that the new 28 days' statutory leave includes all statutory and bank/public holidays, so that employees cannot claim that they are entitled to a total of 36 days' holiday.

What does the "Statutory Cap" mean?

The regulations have capped the statutory leave entitlement at 28 days. This will be the same for all workers, so (for example) people who work for six days a week and who are currently entitled to 24 days' holiday will still only be entitled to a total of 28 days' holiday after 1 st April 2009.

How do I calculate increases to holiday entitlements where the holiday year does not start on 1 st October?

The increases taking place in October 2007 and April 2009 will be calculated proportionately depending on when the employee's holiday year starts. The Government is intending to make an online calculator available for these purposes.

Possible amendment of an ET1 Claim Form to include additional claims that were originally out of time.

In MacKay v Hanna (trading as Blakes Newsagents) the EAT held that where an employee brings a claim less than 28 days after submitting a grievance, the tribunal may allow amendments to the claim form once the 28 days have expired – provided that the claim form contains at least one admissible cause of action. However, the EAT also confirmed that where there is only one inadmissible cause of action, the original claim cannot be amended after the 28 days have expired (London Borough of Hounslow v Miller).

Mrs MacKay was employed by Mr Hanna of Blakes Newsagents (Blakes). She was dismissed and on 5th December 2006 she submitted a grievance and presented an ET1 claiming unfair dismissal, age discrimination, discrimination under the PTW Regulations, breach of contract and unpaid holiday pay.

The EAT rejected her claims for age discrimination, discrimination under the PTW Regulations and for unpaid holiday pay because statutory grievance procedures applied to those claims and she had not waited the obligatory 28 days after making the grievance. The tribunal did not, therefore, have jurisdiction to hear the claims. The unfair dismissal and breach of contract claims were accepted.

In January, Mrs MacKay sought to re-present the claims that were previously rejected as the 28 day period had elapsed. However the tribunal refused to accept the claims or to allow amendments to the claims that had already been accepted.

Mrs MacKay appealed to the EAT against the tribunal's decision not to allow amendments to her existing claims.

The EAT held that the age discrimination claim was not a freestanding claim but related to the unfair dismissal claim, and therefore the claimant did not need to bring a grievance in respect of it before bringing her claim.

The EAT held that the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 and the Employment Act 2002 (Dispute Resolution) Regulations 2004 do not preclude amendment of a claim form at the appropriate time of an existing and valid claim that has been accepted by a tribunal

It therefore held that the existing claim in this case (of unfair dismissal and breach of contract) could be amended to include the claim for holiday pay. It was of the view that it was more sensible to amend an existing claim form than to present a new claim. In the circumstances the EAT could find no reason to refuse the amendment

TUPE 2006: Service Provision Changes

The Employment Tribunal considered the provisions relating to service provision changes in TUPE 2006, in the cases of Hunt v (1) Storm Communications Ltd (2) Wild Card Public Relations Ltd and (3) Brown Brothers Wines (Europe) Ltd, in terms of whether they applied when a client changed PR agencies. It was concluded that they did.

Although the case has now gone to the EAT on appeal, it does provide some useful pointers on how tribunals are approaching these provisions.

Brown Brothers Wines Ltd engaged the services of Storm Communications Ltd for PR purposes. Ms Hunt was employed as an account manager by Storm, and although not assigned to a particular client, she spent 70% of her time working on Brown Brothers' accounts.

In June, Brown Brothers' gave notice to Storm that it was re-tendering its PR contract. Although Storm bid for the new contract, it was awarded to Wild Card Public Relations Limited. Ms Hunt was informed by Storm's managing director that he believed a TUPE transfer had taken place and that her employment would transfer to Wild Card. By September, nothing had been heard.

Wild Card eventually obtained from Storm the statutory information required under Reg 11(2), and the amount of time Ms Hunt spent on the account. They argued that TUPE did not apply as she was not "essentially dedicated" to the account. Storm paid Ms Hunt up until 28 th September.

Ms Hunt brought claims against Storm, Wild Card and Brown Brothers. There was a Pre-Hearing Review to establish if there was a TUPE transfer and, if so, whether Ms Hunt's employment transferred, to whom and when.

Ms Hunt argued that there was a service provision change when Brown Brothers changed PR agencies as under TUPE 2006, she as an individual, could be described as "an organised grouping of employees" , which had as its principal purpose the carrying out of PR services for Brown Brothers. She therefore argued that her employment transferred to Brown Brothers on 28 July and subsequently to Wild Card on 2 October under TUPE 2006.

Wild Card argued that Ms Hunt's "principal purpose" was not the Brown Brothers' contract as she spent only 52% of her time on that contract and she had no contractual obligation to carry out that work.

The tribunal found that there was a service provision change under regulation 3(1)(b)(ii) and it identified the "organised grouping of employees" as Ms Hunt.

The tribunal decided that the principle purpose of Ms Hunt was to provide the services to Brown Brothers and that Brown Brothers intended the services to be carried out by Wild Card after the change.

The tribunal found that the date of the transfer was the date Brown Brothers terminated its contract with Storm as this was the date on which Brown Brothers dispensed with Storm's services "in the full knowledge" that they would subsequently be provided by Wild Card.

Disability Discrimination in Senior Employment

The case of Paterson v The Commissioner of Police of the Metropolis UKEAT/0635/06, decided on 23^rd July, addressed the issue of a senior employee with dyslexia and provides further clarification of the definition of "normal day-to-day activities" for the purposes of the Disability Discrimination Act 1995 (DDA).

The Claimant, Mr Paterson, had spent over 15 years in the police force and had achieved promotion up to the level of Chief Inspector without realising any disadvantage before discovering in 2004 that he was dyslexic. As a result of his diagnosis it was proposed that Mr Paterson should be granted 25% more time to complete the assessments required for promotion to the rank of Superintendent.

Section 1(1) of the DDA states that a person has a disability "if he has a physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities."

The tribunal accepted that Mr Paterson had been dyslexic throughout his police career but, given his ability to achieve the rank of Chief Inspector without any knowledge or consideration of his dyslexia, the tribunal investigated whether the dyslexia had any substantial impact on his ability to carry out day-to-day activities.

The tribunal found that, although Mr Paterson was at a disadvantage compared to his colleagues, he suffered no impact on the day-to-day activites he undertook when compared to the ordinary person in the population and as such, Mr Paterson was not disabled in the meaning of the DDA and the police did not have to adjust the selection procedure for promotion to accommodate his dyslexia.

On appeal, the Employment Appeals Tribunal (EAT) found that the correct measure of disability was not the average person but a comparison between what the individual can do and what he would be able to do without the impairment. The EAT found that the assessments that Mr Paterson had to undertake were day-to-day activities and that it was obvious that a person who requires 25% longer to complete such an assessment would be at a substantial disadvantage to if he did not have dyslexia. The EAT overturned the decision of the tribunal and found Mr. Paterson to be disabled under the DDA, stating that any decision to the contrary would undermine the whole purpose of the DDA.

Draft Employment Legislation for the forthcoming year

In the draft legislative programme published by the Cabinet Office in July an Employment Simplification Bill was included, the purpose of which is to simply, clarify and build a stronger enforcement regime in key aspects of employment law.

The Employment Simplification Bill includes provision for:

• Repeal of statutory dispute resolution procedures and implementation of a new package of measures in accordance with the outcome of the Gibbons review of workplace dispute resolution to encourage early/informal resolution and changes to the employment tribunal system.

• Introduction of a straightforward penalty for businesses that do not comply with minimum wage requirements to clarify and strengthen the national minimum wage enforcement framework.

• Strengthening of the employment agency standards enforcement regime.

• Amend the Trade Union and Labour Relations (Consolidation) Act 1992 to allow trade unions to expel members based on their membership of political parties following the judgement delivered by the European Court of Human Rights in the case of ASLEF v UK.

The bill is item 10 in chapter 5 of the draft legislation programme which can be viewed here: http://www.cabinetoffice.gov.uk/reports/governance.aspx

DTI to become DBERR: Department for Business, Enterprise and Regulatory Reform

In his new role as Prime Minister, Gordon Brown announced changes to "sharpen the focus of central Government on the new and very different challenges that Britain will face in the years ahead."

As part of these changes, The DTI will become the Department for Business, Enterprise and Regulatory Reform or DBERR for which John Hutton will be Secretary of State.

The new department will focus largely on promoting "productivity and enterprise" to create a more competitive economy.

The DBERR will be responsible for:

• Creating conditions for business success, engaging with business and promoting competitiveness, productivity and enterprise across Government and within the EU.
• Ensuring improved quality of life for employees.
• Provide support for the new Business Council for Britain. The Council will be made up of senior business leaders from a range of sectors and will meet twice a year to provide clear, independent advice on priorities for reform to enable businesses to compete globally.

The DBERR will also share responsibility with the Department for International Development for trade policy and the Foreign and Commonwealth Office for trade promotion. The Better Regulation Executive will move to DBERR to work on the promotion of better regulation in the business, public and voluntary sectors.

Tribunals, Courts and Enforcement Act 2007 receives Royal Assent

The Tribunals, Courts and Enforcement Act 2007 received Royal Assent on the 19 July 2007, relevant provisions are:

• Streamlining of the process by which tribunal awards are enforced.

• Tribunal chairmen are to become employment judges to mediate proceedings.

Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.