Employment Law Coffee Break | Covid-19 update, a spotlight on the Employment Tribunal, using salary sacrifice arrangements for pensions and the latest holiday pay decision

Written on 25 Mar 2021

Welcome to our Employment Law Coffee Break in which we highlight the latest developments and issues impacting UK employers.

Covid-19 update

This week marks one year on from the first Covid-19 lockdown; our latest webinar (recording here) looks at a number of the current issues facing businesses including: the extension of the Coronavirus Job Retention Scheme, the myriad of issues around the so-called "jabs for jobs" and considerations in unlocking the office as the end of home working restrictions potentially comes into sight. If you would like more guidance on any of these issues, please speak to your usual Osborne Clarke contact. Two imminent dates for employers to be aware of are:

  • 31 March: The last date on which businesses can register to order free rapid lateral flow coronavirus tests for their workforce.
  • 1 April: From this date the clinically extremely vulnerable (CEV) in England will no longer be advised to shield. In line with the government's Covid-19 spring roadmap, those on the shielded patient list can begin to follow the national restrictions alongside the rest of the population (but are still advised to take extra precautions to keep themselves safe). Letters are being sent to those who are CEV with practical steps to follow to reduce risk, including working from home where possible. The Business Disability Forum has published a toolkit for employers aimed to help them bring employees with disabilities back into the workplace safely.

As businesses look beyond lockdown, the government has emphasised the need to create new jobs and attract diverse talent to meet future business demands and wider commitments. The Centre for Social Justice has this month published a new report "Now is the Time" which recognises the gap in disabled people in employment. It points to the perceived challenges employers have in making reasonable adjustments, and stresses that what is needed is a "systematic dismantling" of the barriers disabled people encounter in securing reasonable adjustments, to progress into senior and high skilled roles and the increased rate of automation and digitalisation which has been brought about in responding to Covid-19 "needs to be undertaken in an accessible and inclusive way for all".

Ahead of the publication of the government's strategy on disabled people (which has been delayed due to Covid-19), the report makes a number of recommendations to the government including raising awareness of the Access to Work scheme, improving accessibility to apprenticeships and internships, and introducing flexible working for all, mandatory disability pay gap reporting.

A spotlight on Employment Tribunals in light of Covid-19

Following on from last week's Coffee Break, where we looked at the latest figures published by the Ministry of Justice, this week we talk to Phillip Chivers, who leads our Employment Tribunal Management service on how the Covid-19 pandemic has impacted on the claims we are seeing in practice and practical steps for employers faced with a claim.

It has also been reported that the government is reviewing the latest reforms to the whistleblowing regime to ensure "they remain fit for purpose" following a surge in employees who claim they were dismissed for speaking up about Covid-19 related issues. Plans remain for a single body to be introduced to enforce workers' rights, including whistleblowing protections, as part of the Employment Bill announced at the end of 2019.

Using salary sacrifice arrangements for pensions: potential pitfalls

In recent months, we have been advising clients on some thorny issues that can arise when using salary sacrifice arrangements for pension contributions. Potential pitfalls include:

  • Forgetting to make the necessary amendments to the employee's contract;
  • Failing to give employees enough information to give informed consent; and
  • Not being clear as to the position when an employee is on maternity leave.

We look at these issues in more detail here. If you would like a review of your salary sacrifice arrangements or help with setting up a new arrangement, please contact one of our experts Claire Rankin and Alicia Cain.

Claiming holiday pay for leave which has been taken but not paid

Holiday pay is an area rife with uncertainty as UK tribunals and courts have sought to interpret the UK entitlement to four weeks paid statutory holiday under the Working Time Regulations (WTR) in line with the case law from the European Court of Justice (ECJ) on the Working Time Directive (WTD). The WTR also provide an additional 1.6 weeks paid statutory holiday which stands apart from rights under the WTD.

A recent Employment Appeals Tribunal (EAT) decision has looked at the right of a worker to claim for pay where holiday has been taken but was unpaid. The EAT has confirmed that the employee's recourse is a right to claim for loss of pay under the WTR and/or for an unlawful deduction of wages under the Employment Rights Act 1996 (ERA) but that these claims must be brought within three months, beginning with the date on which it is alleged that the payment should have been made or, in the case of a claim under the ERA, the last date in a series of alleged underpayments.

In reaching its decision the EAT provided some helpful clarifications on previous holiday pay decisions:

  • The EAT distinguished the claim here from King v Sash Windows; in Sash Windows the ECJ found that a worker who had both not been paid and not taken holiday was allowed to make a claim going back over many years. In that case the failure to provide paid leave had acted as a disincentive for the individual to take a period of relaxation and recuperation. That was not so here as on the facts the claimant accepted he had in fact taken his leave.
  • The EAT also confirmed the earlier decision in Bear Scotland that for the purposes of the ERA a series of deductions will be broken where there is a gap of at least three months. This decision has been called into question by the Court of Appeal in Northern Ireland and which has been appealed to the Supreme Court. Since July 2015, statutory provisions also only permit holiday pay claims to extend back two years.

We wait to see if this case is appealed further. In the meantime, the Supreme Court is due to hear the appeal on 22 July 2021 in East of England Ambulance Service NHS Trust v Flowers on the extent to which voluntary overtime counts towards normal remuneration for the purposes of calculating holiday pay.