IGA News

Legal Update - June 2015

Legal Update - June 2015

01 June 2015

The Lock decision – holiday pay

The Leicester Employment Tribunal has handed down its long awaited decision in Lock v British Gas. Following the ECJ’s decision last year, which we have reported on previously, the Employment Tribunal has held that Mr Lock’s holiday pay should include an element for his commission. This is important news in the motor industry as pay in sales inevitably includes a large element of commission pay. This was largely expected and will impact on future holiday pay entitlement, though any potential back pay claims will soon be reduced by the two year cap on backdated claims which takes effect on 1stJuly 2015. However, there are still some unresolved issues following the decision in Lock and it is to be hoped that they may be addressed in future cases. We will of course report back to members on future developments in more detail as and when they arise.

Unfair dismissal finding for cocaine positive bus driver

In a recent case (Bailes v First Bus) a Bristol bus driver who was dismissed after testing positive in a saliva test for cocaine has been awarded an £84,000 pay-out for unfair dismissal by the Employment Tribunal. The driver persuaded the tribunal that the positive drugs test resulted from him handling bank notes contaminated with the illegal substance handed over by passengers and not from his personal use of cocaine. The tribunal was particularly critical of the employer’s failure to investigate the explanations put forward by the Claimant and the saliva test results which he had commissioned himself. With the recent introduction by police of roadside drug testing, this is likely to have an increasing impact on businesses in the motor industry and Mr Bailes’ case is an important reminder of the need to carry out a fair and reasonable investigation into drugs and alcohol allegations before dismissing or disciplining staff.

Exclusivity in zero-hours contracts

Whilst the use of zero-hours contracts may not be widespread in the motor industry, it is important to be aware that the government has made much play of its intention to ban exclusivity clauses in zero-hours contracts (ZHC) ie a clause which seeks to prevent a ZHC worker from working for anyone else while at the same time not guaranteeing that worker any particular hours. For those businesses using ZHC, following the result of the recent elections they will need to watch developments very closely to avoid falling foul of the law and we will keep you up-dated on those as and when they arise.

Penalty for underpayment of the national minimum wage

The government has proposed that the maximum penalty that can be imposed on an employer that underpays its workers in breach of the National Minimum Wage law will be calculated on a per-worker basis rather than on a per-notice basis. Currently the maximum penalty is £20,000 per notice of underpayment, irrespective of how many workers are covered by such a notice. The law will be changed (S.152 of the Small Business Enterprise and Employment Act 2015) so that the £20,000 maximum appliesper worker underpaid. It is however important to stress that the proposal needs what is called a commencement order to activate it and so again much will depend on the priorities of the next government. Meanwhile, we report in more detail on the government’s recent announcement about national minimum wage increases below.

National minimum wage increases

The national minimum wage will increase by 20p an hour to £6.70 from October, the government has announced. The changes will benefit more than 1.4 million workers. The hourly rate for younger workers will also rise, and for apprentices it will go up by 20% - or 57p – to £3.30 an hour. The rate applies to apprentices aged 16-18 and those aged 19 and over who are in their first year. All other apprentices are entitled to the national minimum wage for their age. The rates were recommended by the Low Pay Commission but the government has gone further than the 7p an hour increase suggested for apprentices. The statutory minimum for 18-20 year olds will also increase by 3% from October, £5.13 to £5.30, and by 2% for 16-17 year olds taking the rate to £3.87.

Andrew Macmillan


Motor Industry Legal Services

Confessions In Disciplinary Investigations

The case of CRO Ports London Ltd v Wiltshire has reminded us that confessions in disciplinary investigations must be carefully considered.

Mr Wiltshire was a supervisor overseeing work that involved heavy lifting. He was dismissed after a container of which he was in charge fell 20 feet to the ground when being lifted. He accepted full responsibility for the incident and admitted that the procedure he had carried out for securing the container was dangerous.

Nonetheless the Tribunal upheld Mr Wiltshire’s claim for unfair dismissal. The Tribunal said that if the employer had conducted a wider investigation it would have uncovered facts which put Mr Wiltshire’s admissions into a wider context. The employer should have looked at the level of pressure its employees were working under and taken into account that Mr Wiltshire’s dangerous actions had been impacted by that pressure.

The EAT at the Appeal concluded that the Tribunal had misapplied the law and had substituted its own judgment for that of the employer rather than considering whether the employer’s decision was within “the range of reasonable responses”; the EAT remitted the case to a different Tribunal to be considered afresh.

In Conclusion

In its decision the EAT emphasised that, even where an employee confesses, employers must still consider whether there is any conflict in the evidence. This case is a reminder to employers that it may not always be enough to close the file once a confession has been recorded.

Andrew Macmillan


Motor Industry Legal Services