Jodie Sinclair provides our regular monthly edit of the latest workforce law developments of which you need to be aware. This month, we cover: holiday pay and commission; private sector organisations and the 'fit and proper' test for directors; tribunal fees, 'drugs driving', the new Acas Code, immigration changes, email access for employees on long term sick leave and a recent EAT case on diabetes as a potential disability.  We also provide details of our forthcoming free workshop on managing difficult grievances – there are some places still available if you wish to register your interest. Finally, don't miss our comment on dismissing statutory officers – out with the DIP, in with the IP.

Holiday pay and commission

The much anticipated decision of the Leicester employment tribunal, in the case of Lock v British Gas, was released last week, and has confirmed that commission should be included in holiday pay if it is part of an employee's 'normal remuneration'.  This follows on from the decision of the European Court of Justice in May 2014 that commission must be factored in to holiday pay, otherwise there is a risk that workers would be deterred from taking leave because of the potential financial disadvantage of earning only basic salary during holidays (please see our previous report for more details).

The Leicester employment tribunal was asked to consider whether the UK's Working Time Regulations were capable of being interpreted in line with the European Court's decision and, if they were, how holiday pay should be calculated for employees who earn commission.  The employment tribunal has found that regulation 16(3) of the Working Time Regulations should have a new section (e) read into it, so that it provides that holiday payments for workers with normal working hours, whose pay includes commission or a 'similar payment', should be treated as workers falling under section 221 of the Employment Rights Act 1996 i.e. workers with variable earnings, whose holiday pay is calculated on the basis of an averaging exercise. However, the correct reference period was left to be determined at a later hearing, so that question still remains unanswered.

Please note that this decision applies only to the calculation of holiday pay in respect of the four weeks' annual leave to which workers are entitled under the Working Time Directive; the extra 1.4 weeks’ annual leave provided by our domestic legislation (the Working Time Regulations) is unaffected by the tribunal’s decision.

We have been advising and training clients on the complexities of recent holiday pay cases, including Lock and Bear Scotland v Fulton – please do contact me or your usual Bevan Brittan contact if we can assist.

Looking ahead – 'fit and proper' for the private sector

While the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 (the "Regulations") and the Fit and Proper Person Test (the "Test") under regulation 5(3) came into effect for NHS Bodies on 27 November 2014, it will come into effect for private sector healthcare providers on 1 April 2015.  The Fit and Proper Person Test implements a number of requirements for Directors and/or their equivalents to meet, including that they must be of good character; not be bankrupt or have entered an arrangement with creditors; and not have been responsible for, privy to or involved in any serious misconduct or mismanagement in the healthcare sector. They must hold the relevant qualifications and skills for the post and must be fit and able to perform their duties, subject to the making of any reasonable adjustments by the employer.  The Test is stringent and providers as well as NHS Bodies should ensure that they are installing the relevant systems within their organisations to ensure compliance with the Regulations. Please click here for my briefing on the Fit and Proper Person test.

Who foots the bill? Fees paid by a Union in the Employment Tribunals may not be recoverable by the Appellant from the unsuccessful Respondent

In a decision that will be welcomed by employers, the Employment Appeal Tribunal (EAT) has said that where a Union pays the Appellant's fees for lodging an appeal, the EAT Rules of Procedure do not allow it to order that the unsuccessful Respondent should pay the Appellant's fees (Goldwater v Sellafield Limited). 

The judgment contrasts with costs rules which allow insurers to recover costs and, as the rules in the Employment Tribunal make a similar provision, this may lead to new arrangements between Unions and their members when it comes to paying their members' litigation fees in the Employment Tribunals. 

Employment tribunal fees for employer's contract claims

In more 'fees news', the government has published an Order which clarifies that the fee payable for an employer's contract counter-claim (made in response to an employee's contract claim) will always be charged by reference to a 'type A' claim, even where the employee's contract claim is brought together with one or more 'type B' claims. Type A claims attract an application and hearing fee of £160 and £230 respectively; whereas Type B claims attract application and hearing fees of £250 and £290 respectively.

Do your policies need updating? Drugs driving laws now in force

Employers should check that driving policies and substance misuse policies reflect the changes to the drug-driving laws which came into force on 2 March 2015.  It is now illegal to drive when over specified limits for specified controlled drugs.  This is not simply in relation to illegal drugs, for which the specified limits are very low, but for other medicines where the specified limits have been set higher than the expected therapeutic dosage.  It is a defence to be over the limit where the medication is prescribed with medical or dental direction and the person's driving has not been impaired as a result.

There is mandatory disqualification and a maximum sentence of six months' imprisonment for those found committing the offence.

Changes to the ACAS Code of Practice on Disciplinary and Grievance Procedures

The revised Acas Code of Practice on Disciplinary and Grievance Procedures (finally) came into force on 11 March 2015.  The revision is minor and reflects the EAT judgment in the case of Toal v GB Oils, where the EAT found that an employee's right to request a specific choice of companion to accompany them to a grievance hearing is absolute provided that the request to be accompanied is itself reasonable (please see our October 2013 news round-up for further details of the Toal case).  The reasonableness requirement therefore does not apply to the choice of companion, but to the request for accompaniment itself.  The choice of companion must still fall within the statutory categories.

Email access / communication on long-term sick leave

In Chawla v Hewlett Packard Limted, the EAT has looked at whether closing down a long-term sick employee's access to their email constitutes a provision, criterion or practice (PCP) which triggers the duty to make reasonable adjustments. The EAT said the answer to that question was yes -  the employer must therefore make reasonable adjustments to communicate appropriately with their long-term sick employees, where they have closed down access to the email accounts. 

Type 2 Diabetes controlled by diet is NOT a 'disability'

Given the increasing prevalence of Type 2 diabetes, employers will be reassured to know that the EAT has confirmed that this condition is not a disability, for the purposes of discrimination legislation (Metroline Travel v Stoute). Mr Stoute had argued that because of the fact that he had to control his diet, particularly by restricting himself from sugary drinks, he was disabled under the Equality Act 2010.  In making its decision, the EAT noted that the statutory guidance on the concept of 'disability' under the Equality Act 2010 makes it clear that conditions controlled by minor alterations of diet would not be covered by the Act; the EAT also felt that, if Type 2 diabetes was brought within the ambit of the Act, then it would mean that people with other conditions such as nut allergies, intolerance to lactose or "what have you" would also be regarded as disabled.

Dismissing statutory officers – out with the DIP, in with the IP

Every local authority will have to take a report to its first Council meeting after its Annual Meeting in May 2015, to amend its Standing Orders to make changes to the procedure for disciplining and dismissing senior officers.

This follows from the publication of finalised new regulations on local authorities' disciplinary procedures for removing a senior officer. The Local Authorities (Standing Orders) (England) (Amendment) Regulations 2015 (SI 2015/881) require local authorities to amend their Standing Orders to incorporate the new arrangements for taking disciplinary action against the most senior council staff. This modification must be made by the first ordinary council meeting held after the 7 May 2015 elections. Please see our Alert for further details.

Training workshops

In April and May we are running a series of interactive, case-study led workshops on managing difficult grievances and SOSR dismissals. Please click on the relevant date and location below for further details and to register your interest in attending.