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Latest Brief - Week Ending 19 December 2014
Just how far should employees be allowed to go in posting potentially offensive comments on Twitter?
The EAT this week has given a useful steer in the case of Game Retail Ltd v Laws, overturning an unfair dismissal finding by the lower Employment Tribunal.
Mr Laws was dismissed for gross misconduct after posting allegedly offensive and abusive tweets on his personal Twitter account. The original Employment Tribunal found his dismissal unfair on the basis that the tweets were posted for private use, unrelated to his work, and there was apparently no evidence that any member of the public or even fellow colleagues would have associated the tweets with his employer. Also, the employer’s disciplinary policy didn’t make it clear that inappropriate use of social media, in personal time, could be considered gross misconduct.
The EAT decided the original Tribunal’s decision was flawed. Whilst Mr Laws did post the messages from a personal Twitter account, and they were not specifically work-related, the original Tribunal didn’t take into account the fact that many of his work colleagues followed his posts. Although there is a balance to be drawn between an employer’s wish to avoid damage to its reputation from social media communications and an employee’s right of freedom of expression, the Employment Tribunal should still have considered whether the employee’s postings were in fact private.
The EAT noted that whether an employee can be fairly dismissed for misconduct for social media postings will depend on the specific facts and the context of what is said, but this is a useful decision to highlight that the public nature of Twitter posts may potentially give an employer grounds to dismiss for gross misconduct, if the comments overstep the mark.
Tribunal Fees – Judicial Review Fails
At last an update on Unison’s application for judicial review challenging the Tribunal fees. The High Court has handed down its decision this week, rejecting the legal challenge. One of the reasons for rejecting the challenge was apparently a lack of evidence that individuals have actually been unable to bring claims because of the costs. It seems the statistics showing the massive reduction in claims simply weren’t enough for the High Court. Fees therefore look likely to stay…at least for now. Permission has been granted to appeal. Presumably Unison will be dragging Joe Bloggs along to the Court of Appeal, in the next stage in the appeal process, to give real life evidence of just how the fees have put him off bringing a claim. Watch this space.
Latest Brief - 17 November 2014 - Holiday Pay
Holiday pay and overtime
The Employment Tribunal Appeal has given its judgment on the calculation of holiday pay and overtime, in the case ofBear Scotland Ltd and others v Fulton (and other related appeals).
The case confirms that all elements of a worker's normal remuneration, including payments relating to non-guaranteed overtime, must be taken into account when calculating holiday pay under the Working Time Regulations.
This is a change from the previous position under UK law, which only required compulsory guaranteed overtime to be included in the calculation of holiday pay.
The reasoning behind the decision is that under the wording of the European Working Time Directive (from which the Working Time Regulations come), workers must be paid their "normal remuneration" during time off for holiday. This broadly means paying their typical average pay (which they would receive whilst at work), rather than simply their basic pay for their basic hours of work, which had previously been understood to be the entitlement for a worker with normal working hours under the UK's Working Time Regulations. It is a basic principle that employees should not be put off taking their holiday entitlement, which could be the case if they would receive lower pay for holidays, than if they were at work.
So what are the key implications of the case?
First it is clear that employers should now change their holiday pay calculations, to include payments for non-guaranteed overtime. That means overtime that employers are not required to offer, but which it is compulsory to work, when asked to do so by the employer.
Voluntary overtime (ie overtime which employees are not required to work but which they freely choose to work) was not specifically covered by the Bear Scotland appeal decision. However, it's likely that Tribunals will interpret the EAT's decision to apply to all overtime, including purely voluntary overtime, particularly where there has been a pattern of working voluntary overtime over a period of time. For that reason, it is advisable to also include payment for voluntary overtime in holiday pay calculations.
How do we work out the holiday pay, to include overtime payments?
Workers must be paid at the rate of a week's pay, as defined in the Employment Rights Act. Generally speaking, for workers with normal working hours, this means calculating their pay when they are off on holiday based on their average weekly pay (including overtime) in the previous 12 weeks before the holiday.
Is there any good news for employers in this case?
Initial headlines suggested that employees would be able to bring claims against their employers for back-dated holiday pay going back several years. However, the EAT's judgment significantly limits the opportunity for employees to do this. The case makes it clear that if there is a gap of more than three months in any holiday underpayment, an employee cannot go back beyond the three month gap to claim for earlier underpaid holiday.
Also, this higher rate for holiday pay only applies to the first four weeks' of holiday (provided for under European law) rather than the full 5.6 weeks' of UK statutory holiday. Pay for enhanced contractual holiday (over and above the statutory minimum) can also be calculated as agreed in the contract, so may also not need to include the higher overtime premium.
Might the case be appealed and overturned?
The EAT has granted permission to appeal and early indications are that the case may be appealed to the Court of Appeal. However, even if there is an appeal, it is unlikely to change the fundamental principle that non-guaranteed overtime should be included when calculating holiday pay. The main element of the appeal will relate the three month gap in claims for back-pay.
Therefore, whilst employers could await the decision of any appeal before changing holiday pay arrangements, in practice it's likely to be better to "bite the bullet" now and put new calculations in place, taking advantage of the three month gap to reduce historic liabilities.
How does this case affect commission payments and should we also be changing that?
This case doesn't deal with commission payments. The European Court of Justice in the separate case earlier this year of Lock v British Gas decided that commission payments should be taken into account when calculating holiday pay (where the commission was directly and intrinsically linked to the individual's work).
That case has been sent back to the Leicester Employment Tribunal to decide how to interpret the Working Time Regulations on holiday pay calculations in the light of the ECJ's decision. The hearing will take place in February 2015 so a decision will come shortly after that.
It's likely that the Tribunal in Lock will also come to a similar conclusion - ie that where the pay includes an element of commission for sales achieved, those commission payments should also be included in the calculation of holiday pay, because they are part of the employee's normal remuneration. However, we are still waiting for a final decision from the UK Tribunals on that point and so employers may want to wait for the outcome of that case before making changes to holiday pay calculations to also include an element for commission.