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Employment Bulletin October 2015

Dismissal 'unfair' because employer failed to get enough evidence

A bakery's decision to dismiss an employee on medical grounds has been ruled unfair because it did not get sufficient evidence before proceeding. However, the employee's claim of disability discrimination was dismissed by the Employment Appeal Tribunal.

The employee had worked at the bakery since May 2008. In May 2010, the bakery managers learnt that the employee had suffered a psychiatric incident, but that he was on medication and coping well.

The bakery's occupational health adviser considered the employee to be disabled for the purposes of the Disability Discrimination Act 1995. In February 2011, the employee was trained to drive fork lift trucks. Then at a medical assessment, he said that he had stopped taking his medication.

During April and May 2011, there were complaints by colleagues about his behaviour. The bakery managers tried to ascertain the employee's mental condition but he denied any mental health problems. They believed him to be incapable of fork lift truck driving.

The employee did not dispute that belief. He was suspended on medical grounds and dismissed a year later. He unsuccessfully appealed against his dismissal and then disclosed a medical report, which documented a history of mental illness including a period of detention in hospital.

The employment tribunal held that the dismissal was unfair because the employer had not first obtained sufficient medical evidence.

However, it dismissed the employee's claim of disability discrimination because the dismissal had not been due to suspected or perceived disability, but because of the employee's conduct and his failure to provide a clear indication of his medical condition.

That decision has been upheld by the Employment Appeal Tribunal.

Changes to employment law come into effect

Several changes to employment law came into effect on 1 October. They include increases to the National Minimum Wage. These are the new rates:

Workers aged:

21 and over - £6.70 per hour

18-20 - £5.30 per hour

16-17 - £3.87 per hour

Apprentices under 19, or over 19 and in the first year of the apprenticeship - £3.30 per hour.

There are also some other developments that should be noted. These include:

Modern Slavery Statements - these are aimed at tackling the problem of forced compulsory labour, servitude and human trafficking. Businesses with an annual turnover of £36m or above now have to publish a statement each financial year outlining the measures they have in place to prevent slave labour being used in their business or throughout their supply chain.

The requirement is part of the 2015 Modern Slavery Act and applies to businesses incorporated in the UK or that run a business in the UK.

Employment Tribunals - the power of tribunals to make recommendations that go beyond the range of an individual's claim in a discrimination case has been removed. The original intention of the power was to promote practices for the benefit of the wider workforce but in reality it was seldom used.

Tips and gratuities under scrutiny in government Call for Evidence

The payment of tips and gratuities in more than 133,000 outlets in the UK is to come under scrutiny in a Call for Evidence by the Department of Business, Innovation and Skills (BIS).

The move follows concerns about how such payments are treated in the hospitality sector and the percentage that goes directly to the employer.

BIS wants to find out more about how tips, gratuities and cover charges are collected and how much employers deduct from their staff. It will also consider whether action can be taken to ensure that employers do not withhold any more from tips than is needed to cover the costs of administering credit card and payroll transactions.

Under current legislation, cash tips given directly belong to the employee, not the employer. Tips paid directly to the employer, for example, by credit card as a percentage of the bill, are the property of the employer. Whether or not those tips should be passed on to the employee will depend on the individual employment contract.

However, consumer law requires that customers should not be misled about the way service charges are distributed. If an employer tells the customer that the money is distributed to staff when it is not then there may be a breach of consumer protection regulations.

Tips do not count towards the National Minimum Wage.

The government says it wants to improve standards and transparency and is particularly interested in the prevalence of different practices in relation to tipping, including admin charge deductions, the use of troncs (where tips are pooled and shared between staff) and charges falling to workers in relation to their sales.

BIS wants to hear the views of both employers and employees. The Call for Evidence runs until 10 November.

Care worker not entitled to be paid for 'all the time spent on call'

A care home assistant was not entitled to be paid for all the time he was on call because for most of that time he was resting or asleep. Merely being on site did not entitle a worker to be paid in full for the whole shift.

That was the ruling of the Employment Tribunal in the case of a care assistant who lived at the care home where he worked.

The tribunal heard that he had been employed as an on-call assistant and had been provided with free accommodation. He was required to be in the flat from 10pm until 7am. He was able to sleep during those hours, but had to respond to any requests for assistance.

The assistant was paid a weekly rate and was rarely asked to answer a call. He claimed payment for his full nightly on-call hours at the national minimum wage from the time that the National Minimum Wage Act 1998 came into force. He had not taken holidays during that period and so wanted to carry forward his paid leave entitlement.

The tribunal ruled against him on both issues. It held that his place of work was also his home and so the time that he was on call was spent at home, where he was allowed to rest and sleep. He could only claim payment for time spent answering calls, which was rare.

The tribunal also found that where a worker could have requested paid leave, but did not, he could not carry forward his past entitlement.

Those decisions have been upheld by the Employment Appeal Tribunal.

Tougher penalties for employers who fail to pay minimum wage

Employers are to face tougher penalties if they fail to pay the minimum wage, following new measures announced by the government.

Business Secretary Sajid Javid said: "There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law."

The measures include:

  • Doubling the penalties for non-payment of the National Minimum Wage and the new National Living Wage when it is introduced in April
  • Increasing the enforcement budget to tackle offenders
  • Setting up a new team in HMRC to take forward criminal prosecutions for those who deliberately do not comply
  • Ensuring that anyone found guilty will be considered for disqualification from being a company director for up to 15 years.

The government says the new enforcement team will have the power to use all available sanctions, including penalties, prosecutions and naming and shaming the most exploitative employers.

The calculation of penalties on those who do not comply will rise from 100% of arrears to 200%. The penalty will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged.

A new Director of Labour Market Enforcement and Exploitation will be created to oversee enforcement of the National Minimum Wage, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority (a non-departmental public body of the Home Office). The Director will set priorities for enforcement based on a single view of the intelligence about exploitation and non-compliance.

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