Employment News – March 2014

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National Minimum Wage
The Low Pay Commission (LPC) has recommended that the adult NMW rate (currently £6.31) be increased by 3% to £6.50 an hour with effect from 1 October 2014. Approximately 1.35m workers in the UK are paid the NMW and an increased figure of £6.50 would obviously bring a lot more workers into this category. There is also likely to be a ripple effect as workers currently paid just above any increased NMW rate will expect their pay to be increased in turn.

An above-inflation rise in the NMW is clearly supported by the Government and the LPC has commented, “Provided the economy continues to improve we expect to recommend further progressive real increases in the value of the minimum wage, restoring and then surpassing its previous highest level, so that 2014 will mark the start of a new phase – of bigger increases than in recent years – in the work of the Commission.”

In a related development, the maximum financial penalty for employers who flout the NMW has increased from £5,000 to £20,000 and the Government also wants to amend the law to make this penalty apply to each underpaid worker.

Employers currently paying the NMW may want to begin thinking now about how they will manage the proposed increase both in terms of NMW workers and workers paid just above it. The changes also make it all the more important to make sure that employees on or close to the NMW (especially those who work ‘on call’, travel between jobs as part of their working day or do varying amounts of overtime) have their working hours correctly calculated to avoid the risk of inadvertently breaching the law.

“Woolworths” Case
We reported in our January employment newsletter that the landmark decision of the EAT in the “Woolworths” case (USDAW & Anr v Ethel Austin Limited (In Administration) & Ors) s was due to be heard by the Court of Appeal at the end of January. The Court of Appeal has now referred the case up to the European Court of Justice (ECJ) for its determination on the question of what is an ‘establishment’. It is therefore likely to be some time before we have any further guidance on this case and, for now, the EAT’s decision stands.

Please refer to our Business Insight for further details of the case. We will report on the ECJ’s findings as soon as they are known.

Judicial Review of Tribunal fees unsuccessful
The Judicial Review challenge to Employment Tribunal fees brought by Unison has been unsuccessful. Unison argued that the fees breached equality laws but the Court found that it did not have enough evidence to consider this point properly. Unison have said they will appeal but, for the foreseeable future, fees are here to stay. One point worth noting is that the High Court made it clear that it would expect Employment Tribunals to order an unsuccessful respondent to pay the successful claimant’s issue and hearing fees.

Government announces launch of Health and Work Service
The Government has announced that a free of charge ‘Health and Work Service’ will be launched later this year. It will be available on a voluntary basis for any employee who is off work sick for more than 4 weeks. GPs will be able to refer employees to the service where they will be assessed by an occupational health advisor. The advisor will prepare recommendations for how the employee might be able to return to work.

Many employers have well established procedures for dealing with long term sickness and the new service is unlikely to affect how these currently operate. It will, however, be interesting to see how effective the service is in reducing long term sickness rates. The Government estimates the scheme could save companies up to £70 million a year in reduced sickness pay and related costs