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Welcome to our February 2016 Employment Law newsletter, keeping you up to date with changes in employment law and informing you of recent case law developments.
DEVELOPMENTS IN LEGISLATION
Zero Hour Contracts
As we reported last month, the exclusivity terms in Zero Hour Contracts (Redress) Regulations 2015 came into force as of 11th January 2016. The Regulations provide that: –
- Any dismissal of a zero hour contract employee would be automatically unfair if the reason for the dismissal is that he or she breached the contractual clause prohibiting him or her from working for an alternative employer.
- It is unlawful to submit a zero hour worker to any detriment if they work for another employer in breach of any such clause.
- There is no qualifying period of service requirement in order to be able to pursue an unfair dismissal claim.
This goes someway to address the abuse of zero hour contracts by employers who inserted an exclusivity clause into the contract prohibiting zero hour employees to work for other employers.
Although zero hour contracts are a useful tool for the catering and hospitality industry, they have been widely abused. If you do have zero hour contract employees/workers it is important to review these and ensure that they are genuinely zero hour employees rather than employees that should be on a permanent contract.
National Minimum Wage
The National Minimum Wage (Amendment) Regulations 2006 come into force on 1st April 2016. The new minimum wage from 1st April 2016 will be:-
- Age 25 plus – £7.20 per hour
- Age 21 – 25 – £6.70 per hour
- Age 18 – 21 – £5.30 per hour
- Under 18 – £3.87 per hour
- Apprentices – £3.30 per hour
Introduction of Penalty Notices for Unpaid Awards on Settlements
A response in Hansard suggests that the Government intends to bring the new “unpaid award penalties” into force as of April 2016. The comment in Hansard states that the Government will issue a “warning notice” where an award or settlement remains unpaid. If the warning is not adhered to they will receive a “penalty notice” for 50% of the outstanding amount subject to a minimum of £100 and a maximum of £5,000. The fines will be paid to the Secretary of State and not to the employee.
CASE LAW DEVELOPMENTS
The question of respect for private life and correspondence arose in the case of Barbeulescu –v- Romania in the European Court of Human Rights. The Claimant was an engineer who had used his business email account to send and receive personal messages with members of his family and fiancée. This amounted to a breach of his contract and having discovered this by chance his employers dismissed him. The Claimant argued that his personal communications should not have been taken into account as part of evidence as it breached his right to privacy.
Although the European Court of Human Rights agreed that Article 8 was triggered they said that the Romanian courts had been right to look at the evidence in deciding whether the dismissal was justified as they recognised the need for employers to be able to verify that employees are completing professional tasks during working hours.
Interestingly the European Court seemed to be persuaded by the fact that the Romanian Court Judgment did not reveal the content of the personal messages sent by the Claimant.
Therefore employers should be cautious and rather than looking at content of personal emails they should rely on the number and frequency of personal messages.
Lord Justice Briggs has published an interim report on the Civil Courts structure. With the suggestion that the Employment Tribunal and the Employment Appeal Tribunal should be moved within the Civil Court structure. We will keep you updated. The final report is not due to be published until July 2016.
Damages for Injury to Feelings
Are damages for injury for feelings taxable? The Claimant in Moorthy –v- The Commissioners of Her Majesty’s Revenue and Customs pursued a claim of unfair dismissal and age discrimination relating to his dismissal. By way of settlement he received £200,000 with his employers treating the first £30,000 as tax exempt and deduct tax and basic rate for the remainder.
The Claimant treated the balance in his tax return as being tax free however the HMRC disagreed.
The Upper Tribunal held that Section 406(b) of ITEPA treats a payment “on account of injury to an employee” as not being taxable. However in such circumstances it had to be a medical condition such as death or a disability. They went on to hold that this did not include injury to feelings which are taxable. We will let you know if there are any further developments on this point.
If you require any further clarification in relation to the above developments, or if you need any further assistance then please do not hesitate to contact our team of specialist employment solicitors on 0161 832 3304.
This newsletter does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein.