Tag: Working Hours

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Anna Denton-Jones Employment Law Employment Rights Act 1996 Holiday HR Part-Time Working Pay

Holiday calculations for part year workers

View of the City of London at sunset

Given we are in peak holiday season, are you happy you are paying people correctly when they take annual leave? The Supreme Court, i.e. the highest Court in our land has just ruled on the case of a teacher whose employment contract meant that she only worked for a proportion of each year, so 32 weeks in total over 3 terms ie;- part of the year. Others might work part of the year such as a ‘season’ on a farm or on a holiday site.

The employer had calculated the entitlement using the shorthand of 12.07% of annualised hours. This number had become standardised shorthand – 12.07% being the figure obtained using the standard working weeks in a year which is 46.4 (52 weeks less the statutory 5.6 weeks holiday entitlement) and 5.6 weeks being 12.07% of 46.4 weeks).

The employee argued they should have looked at her wages during the 12 week period prior to her taking holiday to calculate her average pay over that period. This was the approach ACAS recommended for workers employed on a casual basis or with irregular hours (they have since removed this from their site).

If you used the calculation favoured by the employee, she would be paid more when she took annual leave, in fact 17.5% of her annual earnings.

Since the date of the case, under the Employment Rights Act, if a worker doesn’t have normal working hours, a week’s pay is taken to be their average pay over a 52 week period and if there are weeks in which there is no remuneration being payable such weeks are excluded from the calculation with earlier weeks brought into the reference period instead. This is since April 2020 but in this particular case, the individual was referring to a period before then when the reference period was 12 weeks, excluding the weeks on which she didn’t work).

I suspect often employers who are looking at average pay just work out average pay over the 52 week period and forget to discount weeks in which there are no earnings?

I won’t bore you with the arguments that went back and forth between the various levels of Tribunal and then the Court of Appeal before the Supreme Court but essentially, the Supreme Court has agreed with the Court of Appeal decision. The percentage method of calculation (12.07 or 17.5%) has been rejected comprehensively and should no longer be relied on. They confirmed the average wage calculation instead This should be followed even if it results in part year workers receiving a higher proportion of their annual earnings as holiday pay.

It also means that there is now a dichotomy between accrual of annual leave which accrues in proportion of the work done and pay in respect of such leave which has to be calculated by reference to remuneration during periods of actual work. When it comes to accrual, in the first and last years of employment, accrual is based purely on the passage of time under the Contract – it doesn’t have any relationship to the amount of work done in that time. Non-working weeks could be included in calculating accrued holiday entitlement but are ignored when calculating holiday pay.

In practical terms, this is likely to be problematic, mainly for schools, where somebody does not have regular working hours rather than if somebody’s salary was annualised and paid in 12 monthly instalments, they are already receiving the correct amount of pay during weeks of holiday as during working time.

For those employers who have casual workers, they need to make sure that they are using the calendar week method. If a worker takes a week’s holiday, they should be paid a week’s pay according to the statutory formula which may produce a different rate of pay each time a holiday is taken depending on what their earnings have been in the 52 weeks that they have last worked prior to the calculation being done (or the period of employment if shorter).

That still leaves us with the difficulty in expressing holiday entitlement in contracts. If a worker does a different number of hours or days each week and sometimes may work no hours at all, what does the employer say in terms of quantifying their annual leave entitlement? Here the Working Time Regulations don’t provide any clues. One possible solution as per the government guidance which sits alongside the regulations is to base it on the number of days in an average week of a representative period, e.g. if the average week is 2.5 days long then a day’s holiday equals 1 divided by 2.5 or 0.4 of a week. If the employee took 2.5 days off it would reduce their holiday entitlement from 5.6 weeks to 5.2 weeks.

It is possible that we may now see a flurry of deductions claims from workers who have had their holiday calculated on the percentage. Those claims generally have to be brought within 3 months of the final pay day or the most recent pay day that they say has been calculated erroneously and can go back for 2 years back pay from the date of the claim.

Anna Denton-Jones
Refreshing Law

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Anna Denton-Jones Employment Law Employment Relations (Flexible Working) Act 2023 Employment Rights Act 1996 HR Part-Time Working Remote Working Return to Work

Reform of flexible working

View of the British Houses of Parliament from the river Thames, where the Employment Rights Bill is being debated

The government has launched a consultation relating to some amendments to the flexible working legislation making political mileage out of a willingness to make a request of flexible working a day 1 right, but what will their proposals really mean?

The current system works as follows: someone with 6 months service can make a request to work flexibly to their employer who must consider it within a reasonable time and can decline the request, provided their reasons for doing so falls within a list of eight business reasons for doing so. This covers things like the inability to service their customers, additional cost, the inability to reorganise work amongst existing staff or to recruit additional staff and a detrimental impact on quality or performance, if there is sufficient work during the period of time the employee proposes working and wider planned structural changes.

Given that it’s fairly straightforward for an employer to weave their way through, employees typically have to rely on the discrimination legislation to argue their request results in less favourable treatment of them compared with colleagues. For example, working mothers have often claimed indirect sex discrimination in comparison with the male workforce as regards fixed working hours and patterns of work because they are at a disadvantage as a result of the employer’s policies. The employer then has the ability to justify any indirect discrimination as a proportionate means of achieving a legitimate aim. Employees with caring responsibilities may have to rely on associative discrimination provisions or age discrimination to help them.

The Government’s consultation has asked for views on 5 different things:

  1. Making the right to request flexible working a day 1 right by removing the 26 week qualifying period.
  2. Whether the eight existing business reasons for refusing a statutory request remain valid.
  3. Requiring employers to suggest alternatives if they intend to refuse a request.
  4. The administrative process underpinning the rights to request flexible working and whether that needs any change.
  5. Whether the right to request a temporary flexible arrangement might be utilised.

This tells us that the Government may be considering a separate right to the existing legislation which results in a permanent change to somebody’s working patterns if a request is accepted and that there might need to be a short term agreement but clearly there’s no definition yet to see what that might look like. Anyone who is a working parent trying to juggle children being sent home from school because of COVID-19 will surely have ideas about how such temporary flexibility might improve their lives.

The Government has already signalled that it will introduce a right to carers leave, which would be 5 working days of unpaid leave per year for employees to manage long term caring responsibilities outside of work and which would be able to be taken in any combination from half day to days or part of a week to the week. We have been told that the legislation will go before Parliament “when time allows”.

The CIPD emphasise that flexible working needs to be thought about in wider terms than just whether somebody is working from home versus working in the office. There is a whole range of flexibility in relation to flexi-time, part-time working, compressing hours such as working a 13 day fortnight and job shares.

The Government is going to be considering the lessons that have been learnt from COVID-19 and the undoubted seismic changes in what employees want in terms of their desires and preferences to spend less time commuting and how that is balanced against what employers want in terms of what is workable for them and what is in the interests of the business. Quite how that balancing exercise will play out will be interesting – from a legislator perspective, my money would be on incremental changes only and the employers retaining the upper hand but realistically, all employers needs to consider the current jobs market and the fact that employees are gravitating towards those organisations who they feel are most likely to meet their needs and any employer who is ignoring the issue of flexible working is likely to experience the implications in their attrition rates and challenges recruiting.

It’s always worth remembering to trial something before having to commit to it fully. Often a trial is the only way to successfully assess whether or not something works as a compromise for both parties.

Anna Denton-Jones
Refreshing Law

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Anna Denton-Jones Communication Employment Contract Employment Law Employment Rights Act 1996 Overtime Right to Work

The right to disconnect — Tread carefully

View of the City of London at sunset

As more and more of us feel that we are losing the ability to switch off from work and take an uninterrupted rest, which is of course required under the Working Time Regulations, more and more discussion is taking place about whether we need some kind of “right to disconnect”.

The French led the way in 2017, amending their Labour Code to include this right for employers with more than 50 people – their law requires the employer to negotiate with employee representatives to control the use of digital tools. Italy, Spain, Slovakia, Luxembourg, Netherlands and Germany have all followed suit with Ireland being the most recent addition. In Ireland their Code of Practice requires employers to have a policy in place which confirms that employees have a right not to work outside of normal working hours, that employers and colleagues should not routinely email or call outside of those working times and the employee should not be penalised for refusing to work during non-working hours.

Whilst that Code of Practice doesn’t have the force of law of in the sense that breaching it leads to a claim for damages, it could be used as a supporting argument when somebody is bringing a claim about something like breach of working time, health and safety legislation or bullying and harassment or plain old breach of the implied term of trust and confidence for a constructive dismissal.

You may have seen email footers that more routinely now set out the times in which somebody is likely to be contactable and/or answering their messages. More and more employers are carving time out in diaries when meetings cannot be timetabled and dictating that meetings should not be timetabled at unsociable hours, save in emergency circumstances.

Initially I took the view that employers in the UK should not be waiting for our Government to legislate, (the TUC has called for the Government to include something in the Employment Bill but there is no indication that they are thinking of it) and encouraging employers to incorporate something into their policies and procedures.

However, I also remember the days before the Blackberry when my desktop PC sat on my desk in the office and I was unable to deal with email correspondence if I wasn’t physically at my desk. I remember being given a small square to stick on the back of my hand by a colleague that I did some stress at work training with for a large employer. The square would change colour back to blue when your body chemistry changed and your body was full of the stress hormones, cortisol. As an experiment I kept this and placed it on my hand the next day that I was due in the office. I remember driving to work and monitoring the situation. During my commute to work, when I was beginning to think about work, the feedback was that I was not suffering from stress. However, as I approached the door and was using my door entry fob, that is when my stress levels rose, telling me that the anticipation of what I might find when I logged my computer on was stressful to me.

I approached my desk and duly logged on and my stress levels remained high until the time when I’d managed to see what was there and prioritise what was urgent and what else could take a bit longer to deal with. Once I had a handle on the situation, the colour of the square returned to normal.

When the ‘Blackberry’ was introduced (which is a form of mobile phone for those you who are too young to remember!), allowing me for the first time to have email on the go I remember thinking it was a positive thing and that now in the short moments that you might have waiting somewhere or when you have parked your car, you keep an eye on things, delete the rubbish and then arrive back at my desk ready to roll because I would know what things I needed to deal with and when. That’s many years ago now and I’ve still always thought that the ability to have your email follow you has actually been a positive thing on balance.

What is different now stems from a number of issues:

  1. The sheer volume of emails being sent. From employees being copied in on emails that they don’t need to be, to having email conversations with colleagues when actually a quick phone call would be much more efficient, those emails where people won’t let go of the conversation and so send another email…. The list goes on.
  2. Remembering email is just a tool – it is how we use it for good or ill that counts. What I am noticing is that the pandemic seems to have put everybody to a state of ‘high alert’ where everything is urgent and everybody expects a response now and timelines have become unmanageable and isn’t it that that is the issue rather than being connected?

Any employer considering how they deal with mental health issues and wellbeing particularly as we move towards more hybrid forms of working, will need to be putting in place guidance around employees not feeling that they need to work outside their set hours but the key underlying issue is workload and I would suggest that it’s workloads in general that need to be being looked at rather than focusing solely on something like the right to disconnect. It will only ever be part of the jigsaw puzzle.

On 21 January 2021, the European Parliament approved a Resolution asking the Commission to introduce a Directive to establish the minimum requirements for remote work across the EU which would include the ‘right to disconnect’. That would require employers to establish a detailed written statement setting out arrangements for switching off digital tools for work purposes; set out systems for measuring working time; encourage training and awareness of the right to disconnect in the workplace and make sure that workers don’t suffer adverse treatment or dismissal for having exercised their right. This will undoubtedly reinforce things across Europe and employees are naturally going to start to gravitate towards those organisations that they feel are looking after them and shunning those who they feel are abusing their private lives by intruding on them.

We are likely to see rapid change in this area but I would caution employers to look at the whole picture and not just this narrow aspect. A poll conducted by Owl Labs and reported in People Management found that lots of employers are considering implementing shorter working weeks with others concerned that focusing on core working hours could be to the detriment of those who have to work in a flexible way for caring reasons including parents. This is a topic I will return to.

Anna Denton-Jones
Refreshing Law