From the 1st October 2010, the National Minimum Wage adult rate will be extended to cover those aged 21 and over (previously it only covered those workers aged 22 and over). This rate will rise from £5.80 to £5.93 per hour.

For workers aged between 18 and 20, the National Minimum Wage rate will increase from £4.83 to £4.92 per hour.

Workers aged 16 to 17 are also set to benefit as their National Minimum Wage rate rises from £3.57 to £3.64 per hour.

The government will also be introducing a new minimum wage category for apprentices aged 16 to 18, at a rate of £2.50 per hour. This new rate will apply to:

• Apprentices under 19 years of age
• Apprentices aged 19 and over, but who are in the first year of their apprenticeship

If you have any queries about how the above changes may affect your business, please contact our employment department.

Contacts:

Employment Department
Raj Dhokia: r.dhokia@fgdlaw.co.uk

An employee on sick leave who refused to give her consent for her employer’s Occupational Health Adviser to see her GP records was not unfairly dismissed.

The Access to Medical Reports Act 1988 entitled her to refuse the employer access to her GP records. However, her dismissal for gross misconduct was fair because she unreasonably refused a reasonable request.

If you need advice on issues connected with sickness absence, please contact us – we would be pleased to talk to you.

Contacts:

Employment Department
Raj Dhokia: r.dhokia@fgdlaw.co.uk
Martin Fine: m.fine@fgdlaw.co.uk

Chaplin v Howard Kennedy Solicitors [2009]

When the performance of a contract bore no resemblance to its terms, a tribunal was entitled to look beyond the agreement, at the way that the parties actually conducted themselves.

The Agreement stated “no mutuality of obligation” ie the employer was purportedly not obliged to offer work nor the worker to accept it. However, the worker had reported for work 5 days a week for many years, was given work which he always performed personally and always gave the employer notice of his holiday arrangements in good time. The tribunal decided that the written agreement did not represent the true intentions of the parties. The tribunal was not therefore restricted to determining whether there was an employment relationship or a self-employed one, on the basis of the contract.

The tribunal considered a number of factors that pointed either towards employment or self-employment, such as:-

• Regularity of work and pay – employment
• The provision of a vehicle and fuel – employment
• Lack of say in which jobs he did and when – employment
• Claimant’s responsibility for his own tax and national insurance – self-employment

The tribunal concluded that the self-employed contract was a sham; the claimant was employed under a contract of employment.

Launahurst Ltd. v Larner [2009]

If you need advice on contracts, please contact us – we would be pleased to discuss them with you.

Contacts:

Employment Department
Raj Dhokia: r.dhokia@fgdlaw.co.uk
Martin Fine: m.fine@fgdlaw.co.uk

An investigation meeting was cancelled after an employee admitted taking an iPod as a practical joke. She was dismissed following a Disciplinary Hearing.

Her dismissal was unfair because the employer had not investigated her explanation, as a reasonable employer should have done.

What is reasonable will depend on the circumstances. An admission of theft would not require further investigation of the incident, but here the employee had an alternative explanation for her behaviour.

If you need advice on dismissals, please contact us – we would be pleased to talk to you.

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fgdlaw.co.uk
Martin Fine: m.fine@fgdlaw.co.uk

Compass Group UK and Ireland Limited v Okoro [2009]

Disciplinary procedures often prevent employees from having legal representation. The involvement of lawyers may be seen as unhelpful to the resolution of problems within the workplace. ACAS sees legal representation only for exceptional circumstances, for instance if the employee has a particular disability that requires legal representation or if the work environment is a highly specialised or technical one.

A recent decision of the Court of Appeal – Kulkarni v Milton Keynes Hospital NHS Foundation Trust – may lead to substantially greater involvement of lawyers in disciplinary proceedings. Public sector employees faced with career-threatening disciplinary charges may be entitled to legal representation, even if the procedure explicitly excludes it. In Kulkarni (a case involving allegations of improper touching of a patient), dismissal would have made Dr Kulkarni unemployable throughout the NHS.

Other parts of the public sector – Education

There are other parts of the public sector where dismissal can result in a lifetime ban on employment. For example, lecturers in further education and teachers dismissed for certain kinds of misbehaviour (such as fraudulent or sexual) can be placed on List 99 – a Government-held register of people barred from working with children.

If you need advice on employment policies, please contact us – we would be pleased to discuss them with you.

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fgdlaw.co.uk
Martin Fine: m.fine@fgdlaw.co.uk

Employers are generally entitled to recover overpayments made to employees. The issue will often be practical rather than legal. Can the employee afford to repay in one go or should the repayment be spread out over a number of salary payments?

But a genuine mistake will not always entitle an employer to recover an overpayment.

Following long service at the Woolwich Building Society, the employee’s part-time employment was transferred to Barclays Bank where, as a result of the Bank’s oversight, she was paid at the full-time rate for her job. The employee had been led to believe that she would receive a pay increase following the takeover.

The Employment Tribunal found that she was not obliged to repay the overpayments and the Bank was obliged to continue to pay her at the higher rate. She had not known of the Bank’s error, nor could she reasonably have been expected to know about it.

Keenan v Barclays Bank Plc [2009].

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fglaw.co.uk

From 1st October 2009, employers will no longer be allowed to include tips paid through the payroll in National Minimum Wage Payments.

Tips given directly by customers or held collectively and then distributed to workers (“the Tronc system”) already fall outside National Minimum Wage Payments.

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fglaw.co.uk

Pay and benefits – single package when calculating unfair dismissal compensation.

When calculating the financial losses arising from unfair dismissal, an Employment Tribunal must look at the benefit package as a whole. It must not base its calculations on the differences between individual elements of the package.

In Aegon UK Corporate Services Limited v Roberts [2009], the Employment Tribunal wrongly gave the Claimant (who had found another job following dismissal) credit for ongoing pension loss because her new pension was inferior to her old one. Overall, her total package had improved. She was not entitled to a compensation payment as she had not suffered any financial loss.

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fglaw.co.uk

Many companies have owner/employees; any prospective purchaser should clarify their employment status before transfer.

In Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld and Howe [2009], two controlling shareholders of different companies made claims to the Secretary of State for redundancy and other statutory payments, on the basis that they were employees. Employees of insolvent companies can claim a number of payments from the Government – redundancy payments, notice pay, up to eight weeks’ pay and accrued holiday pay.

The Court of Appeal held that activities generally associated with owners were not relevant to determining employment status. The Court ignored the extent to which the owners controlled their companies, whether they had the final say about their own dismissals and whether they had given loans or guarantees. It held that the factors that establish whether or not an individual is an employee are:

Was the contract genuine or a sham?
Was it a contract of employment or some other type of contract?

If you need advice on contracts, please contact us – we would be pleased to talk to you.

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fgdlaw.co.uk
Martin Fine: m.fine@fgdlaw.co.uk

If an employee is summarily dismissed (i.e. dismissed without notice) by letter, dismissal will not generally be effective until the letter is read by the employee. This may be some time after the letter was sent if, for example, the employee was away from home and did not deliberately avoid reading it.

Whenever possible, employers should inform their employees of the dismissal in person and hand them a letter confirming the decision.

If you need advice on dismissals, please contact us – we would be pleased to talk to you.

Contacts:

Employment Department

Raj Dhokia: r.dhokia@fgdlaw.co.uk
Martin Fine: m.fine@fgdlaw.co.uk