On 1st October the National Minimum Wage rose to £6.70 per hour for those aged 21 and over. An increase in the rate happens every October, of course, but next year we will enter new territory. In April 2016 a special supplement will be added to the National Minimum Wage for workers aged 25 and over to make up a ‘National Living Wage’ of £7.20 per hour.
The importance of this change is not just the introduction of a new rate, but the fact that it has been set by politicians. The Chancellor has said that he wants to see the National Living Wage rise to more than £9 per hour by 2020.
One challenge for employers will be to avoid discrimination once 25 year olds will be entitled to a higher rate of pay than their younger colleagues. An employer who dismisses an employee because he reaches the age to qualify for the National Living Wage is likely to be acting unlawfully. It is automatically unfair to dismiss someone because they qualify for the National Minimum Wage and the same is likely to be true when it comes to qualifying for the National Living Wage.
Obviously, raising the minimum rate of pay will increase businesses’ salary costs for their lowest paid workers. But the financial effects may not end there. Where the lowest paid employees in a business have received a pay rise as a result of the introduction of the National Minimum Wage, workers further up the pay scale are likely to expect a rise as well, to maintain separation in the pay scales.
The Chancellor is currently taking some flak from businesses for introducing this change without consultation. But it is difficult to see how he can backtrack on such a clear commitment. It looks like this is a cost that businesses will simply have to absorb.
Working time, as defined by the Working Time Regulations, is time when a worker is working, carrying out his or her activities or duties and is at the employer’s disposal. For employees who need to travel as part of their job, it is pretty clear that that travelling time has to count as working time. The journey is being undertaken on the instructions of the employer and it is necessary to allow the employee to do whatever he or she has to do.
Time spent travelling from home to work is different, however. The employer has no control over where the employee lives and it is generally no business of the employer whether the employee just walks around the corner to get to the office or needs to commute from a town many miles away. Time spent getting to work – and then back home again is therefore not generally thought of as being working time.
We now have a case from the European Court of Justice that adds an important qualification to that. In Federacion de Servicios Privados del sindicato Comisiones obreras v Tyco Integrated Security SL the Court was concerned with technicians who installed and maintained security equipment at customers’ premises in Spain. The company abandoned its regional offices, and began directing its technicians to each day’s assignments through a mobile phone app. This meant that the technicians travelled from home straight to their first job – using a company car – and returned home again immediately after their last job was completed.
The European Court of Justice held that these journeys to and from home had to count as ‘working time’. Each journey undertaken by the technicians was under the instruction of the employer and was necessary for them to carry out their duties.
What does this mean for you? Nothing, unless you have workers who are truly ‘peripatetic’, ie without any normal place or base of work. The industries which are likely to be affected most are the construction industry, care and mobile security, and those who employ travelling sales staff and engineers.
If it affects you, then first you need to make sure that your workers aren’t ‘working’ too much and exceeding limits set by the Working Time Regulations. Remember all workers are entitled to a 20-minute rest break every 6 hours, and to 11 hours uninterrupted rest every 24 hours. You now need to include their travelling time as part of ‘working time’, meaning that the workers might be entitled to rest breaks – or, at least, different patterns of breaks – that they weren’t previously entitled to.
Second, there are implications for the maximum 48-hour working week. If the worker spends one hour travelling to their first site, and one hour returning home at the end of the day, this adds ten hours to their working week. If that pushes them over 48 hours (normally averaged over 17 weeks), you’re probably breaking the law unless they’ve signed a document opting out of their legal rights.
Third, there may be ramifications for pay. Contrary to what’s been reported in some of the national press, these hours will not count for calculating whether someone is receiving the national minimum wage. So on the example above, just because an employee is ‘working’ an extra 10 hours week, you don’t need to worry about their average hourly rate being pushed below the minimum wage.
However, it’s never quite that simple, and there may be other ramifications for pay. If your employees are paid by the hour, and your contracts don’t define what is meant by ‘working time’ (ie they don’t exclude this travel time), there is a risk that they will be able to bring a claim for unpaid salary at their normal hourly rate. Such claims can be backdated for up to two years in an employment tribunal, and up to six years in the small claims court.
If you have workers who might be affected by this, it will be prudent to assess the implications of this for your business. As ever – do speak to us if you have any concerns.
You may need to think about introducing contractual changes, altering shift patterns and factoring in additional rest breaks. It’s worth talking to us to discuss the impact on your business, and how you’ll need to adapt.
Many workers – particularly in the care or hospitality sectors – are required to sleep over in the workplace so that they can be available for work if needed. Generally they are not entitled to be paid at the rate of the National Minimum Wage for this time as long as they are provided with adequate sleeping facilities. However there have been recent cases where it has been held that sleeping over counts as work and must be paid as such.
In Shannon v Rampersad and Rampersad t/a Clifton House Residential Home a care home had a studio flat on the top floor that was occupied by Mr Shannon. He was employed as an ‘on-call night care assistant’. He was required to be in the flat between 10pm and 7am and to respond to any request for assistance from the night care worker on duty in the home. However, he was free to sleep when not being called upon.
After a change in the ownership of the business Mr Shannon was dismissed. In the litigation that followed the EAT held that he was not entitled to be paid the National Minimum Wage while he was asleep in the flat and so rejected his claim £239,490 in back pay.
The EAT had to draw a line between cases where the sleep-in worker is providing a service to the employer merely by being present in the workplace and so can be regarded as ‘working’ and cases where he or she is simply available for work if needed and cannot be regarded as working while asleep. In deciding that Mr Shannon fell on the ‘not working’ side of the line the EAT noted that the care home had a dedicated night worker and that Mr Shannon was in fact rarely required to assist. The EAT felt that the mere fact that by sleeping in the upstairs flat Mr Shannon was helping the care home meet its obligation to provide adequate care for the residents was not enough to entitle him to be paid for the time he spent asleep.
It is also just possible that the EAT was also influenced by the sense that a claim for almost a quarter of a million pounds was somewhat excessive!
When a transfer takes place under the Transfer of Employment (Protection of Employment) Regulations 2006, the employees who are assigned to the unit being transferred automatically become employed by the new employer. The Regulations state that ‘assigned’ means assigned ‘immediately before’ the transfer takes place, so an employee who has left the unit some time earlier will not be covered and will remain with the old employer. Simple really.
In Inex Home Improvements Ltd v Hodgkins & others workers on a building refurbishment project were laid off pending the release of further work under an ongoing contract. They were not dismissed, but ceased working or being paid, in the expectation that further work would soon be forthcoming. As it happened there was then a change of contractor and no further work was released to their employer. The employment tribunal held that, but for the lay-off, there would have been a TUPE transfer when there was a change of contractor, but that the workers could not transfer because they were not actually working when the transfer occurred. The EAT held that that was wrong. What mattered was whether the workers were still assigned to an organised grouping that had the principal purpose of carrying out the activities – not whether those activities were actually taking place at the time of the transfer itself. The EAT held that the lay-off did not necessarily prevent the employees from transferring to the new contractor.
It was an important feature of this case that the lay-off was temporary and that the employer expected new work to come in under the contract relatively quickly. The EAT made it clear that the situation might be different if there was an open-ended layoff or no real expectation that there would be further work to do.
While employees who are temporarily laid off can still transfer under TUPE, the same does not seem to be true for those who are permanently off sick. In BT Managed Services Ltd v Edwards the employee had been off work for over 5 years and it was accepted that he had no reasonable prospect of ever returning. He had been retained as an employee so that he could enjoy sickness benefits under a permanent health insurance scheme, although it seems that these benefits had eventually ended and he was now receiving discretionary payments directly from the employer.
When the unit in which he was employed transferred from BT Managed Services to Ericsson, the question that arose was whether he transferred under TUPE. The EAT held that he did not. To be ‘assigned’ to a part of the business the employee had to have some connection with it beyond merely being a name on a list; he had to actually participate in the economic activity of the unit in question. If there was no prospect of him ever doing so again, he could no longer be regarded as being assigned to that part of the business, with the result that he did not transfer.
The key point here was that the employee’s illness was believed to be permanent. He was not just off sick for the time being. Ordinarily an employee who is off sick will still be regarded as assigned to the appropriate part of the business and will be part of any TUPE transfer. Even employees who have been off sick for an extended period will usually still be assigned as long as there is some expectation of them returning.
An employer faced with long-term absence from an employee must take reasonable steps to discover when/if a return to work is likely – including obtaining medical reports – before deciding to dismiss. Striking the right balance can be difficult, but ultimately an employer is not expected to keep a job open indefinitely.
In Bolton St Catherine’s Academy v O’Brien a teacher suffered an acute stress reaction following an assault by a pupil. She tried returning to work on two occasions, but the pupil who assaulted her was still at the school and she suffered a relapse. After a year of absence there was still no firm indication of when and whether she would be able to return and the employer was worried that even if she did recover there would be the potential for another relapse.
She was dismissed and an employment tribunal found that her dismissal was both unfair and amounted to disability discrimination under s.15 of the Equality Act. The employment tribunal held that the employer had not shown that it had considered the impact of her absence on the business and weighed that against the impact on the teacher of losing her job.
The Employment Appeal Tribunal sent the case back to the employment tribunal to be reconsidered. The employer was not obliged to show that it had specifically weighed up the impact of dismissal on the employee against the impact of her continued absence on the employer. The issue was not whether the employer could have waited a little longer – but whether it should have been required to do so. Common sense dictated that the continued absence of a teacher would have an adverse impact on the business both in the expense of providing cover and also in the need to reorganise her managerial and administrative duties.
The fundamental requirement of a disciplinary hearing is that the employee understands the allegations being made, has a chance to put his or her side of the story and has that explanation considered by the employer with an open mind. Where an employer has an HR department, it usually plays an important part in making sure that a fair procedure is followed – but in Ramphal v Department for Transport, the Employment Appeal Tribunal held that HR’s behind the scenes influence went too far.
A manager had conducted a disciplinary hearing and written a draft report concluding that the employee had been careless rather than dishonest and that a final written warning was appropriate. After consulting with HR however, the draft was changed so that the employee was found to have been dishonest and was dismissed for gross misconduct. The EAT held that an employee was entitled to assume that the outcome of the hearing would be determined without the influence of someone who had not attended and listened to what he had to say. Where HR was consulted after the hearing, its role was to advise on the proper process rather than seek to influence the actual findings made by the manager who had conducted the hearing.
Work can be a hazardous place and the law expects employers to take care to ensure that workers are kept safe.
However a French social economist has identified a health risk that may be difficult to control – boredom. Analysing French social media, he discovered a dramatic escalation in French workers complaining that their working days were ‘boring’ and he says that this creates the danger of psychological trauma and ‘destructured personalities’. He blames French employment laws that make it difficult to dismiss an employee even when there is very little work for them to do.
Perhaps French occupational health professionals need to discover the therapeutic benefits of Candy Crush.