Statutory annual leave entitlement

Statutory annual leave entitlement increases from 24 days to 28 days on 1 April 2009 – although bank holidays can be included in this total.

Implementing this change will be fairly simple for employers whose holiday year is 1 April to 31 March. However, if an employer’s holiday year straddles 1 April (for example, if it is 1 January to 31 December) then some thought will be required to calculate workers’ pro-rata entitlement, based on 4.8 weeks up to 31 March 2009 and 5.6 weeks from 1 April 2009. To assist, an online calculator has been published on the Business Link web site (www.businesslink.gov.uk).

Holidays for the long-term sick

Still on the subject of holidays, the European Court of Justice ruled in the case of Stringer v HMRC that:

• workers on sick leave continue to accrue annual leave;

• at the end of a holiday leave year, if a worker on sick leave has been unable to take annual leave they must be allowed to carry over that annual leave to the next holiday year; and

• the right to be paid in lieu of accrued holiday on termination of employment applies even if the worker has been on sick leave for the whole or part of the leave year.

Aspects of this case reverse current UK law and the Government will be required to change the Working Time Regulations in the light of this decision.

Notice pay and constructive dismissal

Compensation is normally based on a Claimant’s actual loss. Generally speaking, if the Claimant gets another job straight away and therefore has not lost any money as a result of a dismissal, they will not get any compensation. However, this was not the result in the case of SP Ltd v Bell.

Ms Bell resigned in April 2007 and claimed constructive unfair dismissal. She did not work her 6 month contractual notice period. She obtained new employment during the 6 month notice period, so SP argued that they should not have to pay her in respect of her full 6 month notice period. After all, if SP paid her 6 month’s pay, then this would be ‘double-recovery’, because Ms Bell would have been paid twice – once from SP Ltd and once from her new employer.

The Employment Appeal Tribunal, referring to a case dating back to the 1970s, ruled that SP Ltd had to pay Ms Bell for her full 6 month notice period, despite acknowledging that this gave her “a windfall”.

Are bonus schemes discretionary?

The Employment Appeal Tribunal ruled in Small v Boots Plc that a bonus scheme has contractual status even though it is labelled "discretionary" in employment documentation.

The EAT decided that tribunals should look at all aspects of a bonus scheme to determine whether it is truly discretionary. This would include whether bonus is paid regularly, which would make it more likely to be a contractual entitlement.

Duty to make reasonable adjustments

In Kent PCT v Grey, the Employment Appeal Tribunal considered when an employer is exempt from the duty to consider making reasonable adjustments for a disabled employee. In order to be exempt, an employer must show that it:-

1. does not know that the disabled person has a disability;

2. does not know that the disabled person is likely to be at a substantial disadvantage compared with persons who are not disabled;

3. could not reasonably be expected to know that the disabled person had a disability; and

4. could not reasonably be expected to know that the disabled person is likely to be placed at a substantial disadvantage in comparison with persons who are not disabled.

The above list is cumulative, so the employer must be able to satisfy all 4 criteria. This is obviously quite a high bar to get over.

Compensation increases

Sorry to bang on about this, but it is important – particularly if you are making redundancies. Compensation limits and other statutory payments have increased, with effect from 1 February 2009. The main increases are as follows:

• Maximum compensatory award for unfair dismissal: from £63,000 to £66,200.

• Maximum limit on a week's pay (eg for redundancy pay): from £330 to £350

• Maximum basic award / redundancy payment: from £9,900 to £10,500

• Minimum basic award for certain unfair dismissals: from £4,400 to £4,700

• Maximum guarantee payment per day: from £20.40 to £21.50