Employment news round-up, February 2016

This month our news round-up includes: the latest developments on holiday day; an important update on gender pay reporting; the Carter review into NHS finances – what does it mean for the NHS workforce? We also comment on the long-running junior doctors dispute, plus new rules on criminal record checks, whistleblowing and the latest attempts to streamline the employment tribunal process. Anne Palmer reports.

Holiday pay – the latest developments

The Employment Appeal Tribunal (EAT) has this month upheld the employment tribunal's decision in Lock v British Gas and confirmed that commission payments should be included in holiday pay. The claimant, Mr Lock, worked as salesman for British Gas and an important component of his pay was based on commission. This had the effect that his wages were significantly reduced as a knock-on effect of taking holiday. Following a reference to the European Court of Justice, an employment tribunal held that results-based commission must be included in holiday pay and the EAT has agreed. We understand that British Gas is seeking permission to appeal to the Court of Appeal and, in the meantime, it is likely that similar claims relating to commission payments will remain stayed pending the outcome.   Therefore, it would be prudent to avoid rushing to make changes to your holiday pay arrangements as a result of this development, but please do contact me or your usual Bevan Brittan contact if you have any queries.

Gender pay gap reporting – important update

After much anticipation, the government has finally published draft regulations which will implement the new requirement for large employers (i.e. those with over 250 employees) to publish information about gender pay disparity within their organisation. The draft regulations are open for consultation, which will close on 11 March 2016. The consultation documents and draft regulations can be accessed here.

Although the regulations are timetabled to come into effect in October 2016, as expected, there will be a long lead-in time: employers will have around 18 months to publish their first report and will then be required to publish annually thereafter.

The key points are as follows.

• The current draft regulations apply to the private and voluntary sector; the consultation and impact assessment states that reporting will be required of the public sector, but under separate regulations and following further consultation.
• Pay gap information must be expressed as both an overall mean ('average') and 'median' (i.e. 'midpoint') hourly pay rate. The explanation for this is approach is that the government feels they are "complementary indicators": the mean being useful because it averages out extremes; and the median being the best representation of a 'typical' difference, unaffected by a small number of very high earners.
• Pay information must also show the distribution of men and women in each band of four 'pay quartiles' (i.e. a list of all employees in order of value of gross hourly pay, from lowest to highest, divided into four equal bands or 'quartiles' – draft regulation 7).
• The required information must be published on the employer's website and must be retained for at least three years, so that any progress on gender pay equality can be tracked.

NHS resource management in the spotlight

Earlier this month, Lord Carter published his final report on hospital efficiency and productivity in the NHS – the full report can be accessed here.

The report highlights the link between better resource management and increased quality of care - and the NHS workforce is, according to Lord Carter, its most important resource. He therefore identified several ways in which NHS workers should be better managed. The implementation of the report's recommendations will be overseen by the regulator NHS Improvement, of which Lord Carter will become a non-executive director in April. However, hospitals are urged to act immediately on the report's recommendations, many of which focus on better workforce utilisation, including

• moving to e-Rostering systems (and moving away from paper-based rosters) and greater use of the national Electronic Staff Record (ESR): Trust boards are to ensure that the ESR is reconciled to the financial ledger on a weekly basis, with a minimum reconciliation of 95 per cent from October 2016
• the development of a National People Strategy, with a focus on simplifying structures, raising people management capacity, building greater engagement and inclusivity and improving leadership capability from “ward to board”
• increasing staff engagement and proactively managing harassment and bullying, in an effort to increase productivity and reduce staff turnover
• proactively managing levels of sickness absence (these were found to vary between 2.7% and 5.8% between Trusts) and encouraging employee wellbeing, which was found would have a positive knock on effect on efficiency and reduced turnover.

We are regularly working with hospitals, and other healthcare organisations to assist with managing HR spend and sharing best practice to facilitate increasing efficiency amongst staff and management teams.  We are recognised in the Chambers and Partners guide to legal profession as “renowned" for our focus on advising healthcare providers on operational issues, as well as employment disputes. For more details of how we can assist with increasing productivity and implementing transformational workforce change, please click here.

Junior doctors' dispute

As has been widely reported in the news media, the government has announced that it will 'impose' a new contract on junior doctors. Alastair Currie, Employment Partner, has been quoted in The Guardian commenting on the possibility that some Trusts have already sought to implement terms which differ from the national contract model. We are currently advising Trusts on the potential impact of this development on their medical workforce, including possible derogations from any unilateral implementation of new national terms. Please contact Alastair Currie, or your usual Bevan Brittan contact, for more information.  

New restrictions on ET postponements

From 1 April 2016, the government intends to curb applications for postponements of employment tribunal hearings. According to the response to the consultation on this issue, the new arrangements will

• limit the number of postponements that can be granted to a party, other than in "exceptional circumstances"
• prohibit postponements which are requested less than seven days before a hearing unless there are exceptional circumstances; and
• require tribunals to consider granting costs orders where late notice postponements are granted.

The question of what will amount to 'exceptional circumstances' has been left to the discretion of judges and guidance is promised.

Whistleblowing – 'prescribed persons'

A "qualifying disclosure" for the purposes of making a protected disclosure (or 'whistleblowing') will normally only be protected if made to the worker's employer – but it can also be protected if made to a 'prescribed person'. This month, the government has updated its list of 'prescribed persons' – a guide to the full list can be accessed here and the bodies added are mostly healthcare organisations, including Health Education England, the NHS Business Services Authority, Healthwatch England and the NHS Commissioning Board.

Criminal records checks

The scheme allowing for disclosure of all prior convictions, however old or trivial, for certain types of employment, has been subject to a successful human rights challenge. The High Court has held that the scheme does not support the right to private life, under Article 8 of the European Convention on Human Rights. This means that the current criminal records checking scheme will require further amendment to ensure compatibility with Article 8. Until then, employers operating in sectors in which standard or enhanced DBS checks are required will need to ensure that, subject to any sector specific guidance, they exercise independent judgment in considering the weight to attach to disclosures, particularly in circumstances where the disclosures relate to old or trivial convictions.