Just back from holiday? Five employment law developments you may have missed over the summer break

We take a look at five key employment law developments which you might have missed.

1. Increases to discrimination awards: Judicial consultation

Last month we told you that following the Court of Appeal’s decision in De Souza v Vinci Construction (UK) Ltd injury to feelings awards in Employment Tribunal discrimination claims were set to increase (you can read the full alert on our Insights page). With remarkable speed, the Presidents of the Employment Tribunals in England & Wales, and Scotland, have published a joint Judicial consultation paper on this issue. They propose that the guidelines used by the Employment Tribunals to value injury to feelings awards in claims of discrimination (set out in the case of Vento v Chief Constable of West Yorkshire Police and known as the Vento bands) should be substantially increased as follows:

  • Lower band: £1,000 to £8,000 (from £600 to £6,000)
  • Middle band: £8,000 to £25,000 (from £6,000 to £18,000)
  • Higher band: £25,000 to £42,000 (from £18,000 to £30,000)

The bands were last formally updated eight years ago in 2009 and, while the increase will inevitably mean increased cost for employers, it is arguably overdue.
The consultation closed on Friday 25 August and you can find it online on the Courts and Tribunals Judiciary page. However please remember that following De Souza an Employment Tribunal determining an award now should be taking similar factors into account, so these figures may apply by default now, even before the consultation is concluded. What may be as concerning for employers is the additional proposal in the consultation that new figures will be released annually increased in line with the RPI (and rounded to the nearest £1,000), which will result in such awards increasing over time and being harder to predict at the outset of a claim or issue.

Update 5 September: Since this article was first written the Presidents of the Employment Tribunals have responded to the consultation and from 4 September 2017 the Vento bands will be as follows (in Scotland as well as England & Wales): lower band of £800 to £8,400; middle band of £8,400 to £25,200; and an upper band of £25,200 to £42,000, with the most exceptional cases capable of exceeding £42,000.

2. Bereavement leave: New law proposed

The Government has announced that, for the first time, parents who have lost a child will be entitled to a period of statutory leave. The Parental Bereavement (Pay and Leave) Bill was introduced to Parliament on 19 July as a Private Members Bill by Kevin Hollinrake MP (although it appears that the proposal has the full support of the Government). Unfortunately, the text of the Bill is not yet available (as Private Members Bills are often not published until late in the legislative process) so we don’t know how much leave will be given or how it will be paid. This may become clear when the Bill receives its second reading in the House of Commons in the autumn. Currently under the Employment Rights Act, employees have a day-one right to take a reasonable amount of unpaid time off work to deal with an emergency involving a dependent, including making arrangements following the death of a dependent. However, the Bill will introduce a backstop of minimum protection to protect employees. Read the Government press release.

3. The Taylor Review: Transforming the ‘gig economy’ and beyond

The long-awaited Taylor Review of Modern Working Practices (now called the ‘Good Work’ report) has finally been published. The report is packed with analysis of the ‘gig economy’ and proposals for policy reform. One stand out recommendation is that ‘workers' should be renamed ‘dependant contractors’ and that this new descriptor should be supported by new, clearer law setting on employment status. It is also proposed that staff on ‘zero-hours’ contracts should be given the right to request a fixed-hours contract after 12 months, with employers reporting on how many such requests are granted or refused. Other recommendations reach far beyond the boundaries of the ‘gig economy’ and will impact on all employers. These include changes to the right to request flexible working and the creation of a period of employment protection (akin to maternity leave) for employees absent due to ill-health. Read our initial thoughts on the report.

4. Unfair dismissal awards increased (particularly for some employers)

The maximum amount of a compensatory award for unfair dismissal is currently capped at one year’s pay (or £80,541 whichever is lower). In an important decision which largely passed under the HR radar following the furore over fees, the Employment Appeal Tribunal held in University of Sunderland v Drossou that, when a year’s pay is calculated for these purposes, employer pension contributions must be taken into account as well as the payments made directly to the employee. This may significantly increase the maximum award for many employees, especially those with generous pension provision or defined benefit schemes. For example, for almost all public sector employees their potential award is likely to increase by at least 14% (and in some cases more). Read a fuller analysis of the case.

5. Holiday Pay: Voluntary overtime must be included says the EAT

Another important and much anticipated EAT decision this month has provided some further clarity on how to calculate holiday pay (albeit probably not the clarity many of you were hoping for). In Dudley Metropolitan Borough Council v Willetts the EAT held that pay for overtime which is purely voluntary should be included in holiday pay calculations if it is normally worked. The decision does not define what normally worked means, but the EAT endorsed the earlier finding of the Employment Tribunal that doing voluntary overtime as infrequently as once every four or five weeks could count as ‘normally’ working it. The impact of the decision will be felt by all employers who operate overtime payments and approaches to calculating holiday may need to be reassessed once again. Read our thoughts on this case. As always with holiday pay decisions the impact for each of you will depend upon how you operate your own arrangements, so please do talk to us about what exactly this means for you. Whilst it is a binding EAT Judgment, it may well not be the last word on the issue with an appeal to the Court of Appeal still possible/likely (in either this or another case).

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