Peter Etherington Law Employment Services

Employment Update for Small Businesses
July 2018

Dear <<First Name>>

As we enter the holiday season we have another look at the thorny issue of holiday pay, and ask if you are paying the correct amount.  Also this month, you can’t fail to have noticed the continuing trend of cases relating to the new types of workers to be found in the so-called “gig economy”, so we give you a brief update on latest developments.

Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.

Please forward this email to any of your contacts who might find it of benefit.

Regards
Peter Etherington
Tel: 01664 668164
www.etherington.co.uk

Twitter Facebook LinkedIn
Peter Etherington
Are you paying enough holiday pay?

Regular overtime and commission should be taken into account

ACAS has recently launched a new guidance on overtime, which includes the impact that it can have on holiday payments when staff take time off work.  This follows a series of cases in the UK and Europe which make it clear that any additional payments regularly received by staff need to be considered when working out holiday pay.

The common theme in these cases is that workers should not be disadvantaged by taking holiday.  So if someone typically works a few hours overtime every week but only receives basic pay when they go on holiday, that would act as a disincentive.  It is still not clear, however, what is meant by regular overtime.  My view is that if there are often weeks during the year where no overtime is worked, then a worker is not disadvantaged by taking a week’s holiday on basic pay.  It is only where there are very few weeks worked with no additional pay, that this then becomes an issue.  But this is very much a judgement call depending on the specific facts of each case.

If you are not sure whether you are paying the correct amount of holiday, please get in touch so that we can advise you further.

Employee, workers or self-employed contractors?

The “gig economy” continues to confuse

​Last week, Deliveroo settled claims from some 50 of their delivery riders  for underpayment of the National Minimum Wage and unpaid holiday.  The issue being that Deliveroo considered them to be self-employed contractors, who have no individual employment law rights, whereas they argued that they actually had the legal status of ”workers”.  As workers, they would be covered by the National Minimum Wage Act and the Working Time Regulations (which include paid holiday), but not other rights available to employees, such as redundancy pay, the right not to be unfairly dismissed, etc.

This follows the case of Pimlico Plumbers v Smith from last month, in which the Supreme Court (the highest court in the UK) decided that Mr Smith was a worker and not a self-employed plumber.  The main deciding factor in this case was that Mr Smith had to perform the work personally and was not free to send a substitute on his behalf.  Deliveroo has previously succeeded in obtaining a ruling from the Central Arbitration Committee, that its riders were genuinely self-employed because they did have the contractual right to send a substitute and that this right had been exercised from time to time (so was not a sham contractual provision).

This is becoming an increasingly complex and uncertain area of law, so if you use contractors or other individuals who are not considered to be your employees, we would recommend you contact us for a review of their status.

National Minimum and Living Wage Rate​s

The current National Living Wage and National Minimum Wage rates are:

  • £7.83 per hour for workers aged 25 and over
  • £7.38 per hour for workers aged 21 to 24
  • £5.90 per hour for workers aged 18 to 20
  • £4.20 per hour for workers aged 16 and 17
  • £3.70 per hour for apprentices under 19 and those over 19 in their first year*

*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.

www.etherington.co.uk