What is Employment Law?
Employment Law is the body of laws, administrative rulings, and precedents which govern the legal rights, and restrictions on workers and their organizations. It resolves many aspects of the relationship between trade unions, employers and employees. However there are two categories in which employment law is divided. Firstly it deals with the relationship between employee, employer and unions and secondly it concerns employees rights at work through the workers contract.
The Employer and the Employee
Before giving the rights it is important to determine the relation between the employer and the employee. The relationship between the worker and the employer has been of great significance at common law and statute. The person engaged by another under the contract of employment is termed as ’employee’ and enjoys the legal rights. Another class is termed independent contractors or self-employed. They are generally working under contracts and legal rights are generally found in their contract of employment. The third category is a statutory category termed as “workers” and these have limited rights under the Working Time Regulations. The courts established the test for determining the employee’s status in Davies V Presbyterian Church of Wales
It was stated that the employer employee relationship is solely dependant upon the true construction of that document. However there are situations where it is clear that the person is providing services as an employee or independent contractor. If the person is classified as an ’employee’ then he would be given many rights which include most of the ERA rights.. However the courts established many tests for the convenience of the employee. The first is the ‘control test.’ This applies where the worker is guided by the employer as regards what to do, when to do and how to do it, as opined in Yewens V Noakes. A new test was developed, and that became commonly known as the integration or organizational test. In recent times, the courts developed a third test, which is now the modern approach to solving these dilemmas.
Some consideration should be given in the form of work for the wages paid. There has been no problem in case of manual works in respect of sick leave but in common law an employee will need to establish that he has performed the obligations of the contract under which he has been engaged, and in return the employer has an obligation to pay. In Beveridge v KLM UK Ltd it was stated that an employee would be given remuneration for his work if he were entitled to it under the contract. The remuneration for the employee is set out in s.1 and according to ss.8-10 ERA 1996 the employees are entitled to receive a payment statement.
The question of wages has been an issue in the country towards the amount, method, timing and deduction of the employees’ payment. However wages are generally governed by the express and implied terms of the contract.
Every worker has a right of paid annual leave. Previously there was no right to paid annual leave, this was a matter of the terms of the contract and depended on express and implied terms. There were also no right to leave, not taken by workers. In this scenario, the (WTR) Working Time Regulations 1998 came into existence. According to them a contract cannot be valid without consideration of the holidays entitlement and extended rights may be also agreed to. It is still a matter for the parties to decide how much notice should be given for requested leave. For transparency and in order to clarify the law, the
Directive consolidates the original Working Time Directive 1993/104/EC, and it’s amending Directive 2000/34/EC.
The Regulations were uncertain as to employees’ rights. Regulations 13-17 gave the workers right to annual holiday leave with pay. The statutory entitlement arose after a worker had been employed continuously for 13 weeks. This period caused some problems in Wellicome v Kelly Services it was stated that employment prior to 1st October 1998 would count towards this period where as in Stewart v Heron Recruitment it was accepted that unpaid leave would count, if the employment is continuous, where the contract is continuing during the period of the leave. A reference was made to the ECJ for a ruling, in BECTU .The qualifying period of 13 weeks was not supported and it was stated that the Directive did not allow for such a period. After the decision of the ECJ the Government held a consultation and amended the Regulations, removing the requirement of the qualifying period and introducing a provision that leave could be granted from the first day of employment.
Now after October 2001 there is a right to the entitlement at the beginning of the employment, the minimum annual entitlement is 4 weeks paid annual leave and the leave year is normally defined in the contract of employment, but if there is no contract the WTR provides for such an eventuality.
An employer cannot substitute leave entitlement by giving a payment, except where the employee is terminated and a balance of annual leave remains. This is supported by Canada Life Ltd V Gray where two ex-workers were entitled to holiday pay and were entitled to fall in category of worker. The Tribunal in List Design Group Ltd V Catley decided that they did not have to take the holiday to be entitled to be paid for it and as the company failed to pay holiday leave since 1998 this amounted to unlawful deduction of wages.
Dismissed for Misconduct
In Whitley and District Men’s Club v Mckay the question arose whether the employer need not pay any accrued holiday pay to a worker instantaneously dismissed for misconduct. This focused on holiday pay and summary dismissal, if the worker was dismissed for fraud the employer would refuse payment of the accrued holiday pay as specially allowed in Collective agreements included into the contract.
Regulation 14 of WTR provides that where employment is terminated during the course of leave year, the worker is entitled to payment in respect of accrued untaken holiday. Regulation 13(3) states such sum may be provided for the purpose of the Regulation in a relevant agreement; the agreement could be collective or an individual contract. The Employment Appeals Tribunal held that a simple term used as “such sum” couldn’t recover the amount. Hence the term collective agreement expressly covers it, in the long run it was unlawful under the regulations and the employee was entitled to Pro-rata entitlement in the regulations even dismissed on the bases of misconduct. In Hill v Chapell the worker took more than his pro rata that he was usually entitled for in the course of the holiday year, earlier the general law would allow the employer to recover back holiday pay in respect of the unearned days but the worker successfully counter sued, under Regulation 14(4) which states a relevant agreement might provide for recovery by the employer i.e. through express term written in the contract.
WTR create a statutory right for an employee to receive payment on termination of employment as regards untaken leave. There is a formula for calculating the amount payable if there is no contract available, if there is no way that the pay could be calculated the payable amount will be the amount of annual entitlement due up to the termination date less the amount of actually taken leave and payable rate will be calculated on the averaging basis of 12 weeks. If the amount of leave taken up to the terminations date is more than the proportion entitled, then WTR requires the employee to compensate the employer. However, the employer has no right to make the deduction unless stated in the contract, so it is important to check the contract of employment in advance.
Dates of leave
Regulations also provide details for the entitlement for the dates of leave. Leaves entitled to under the WTR, can only be taken in the prescribed leave year. An employment contract provides the length of notice that an employee should give before taking leave. If the employee fails to do so, the minimum notice that should be given in advance is twice the days of the proposed requested number of days for the leave. In Ferguson v Anglo Beef Processors the annual leave for a worker was included into their rest period between the shifts. It was stated that annual leave should be allowed at times when the worker would be working. Giving notices for leave by the employees to employers and also the counter notices given by the employers to employees are covered under Regulation 15. According to this worker must give notice before taking leave.
An employer can respond to the employee’s leave notice by giving counter-notice that the employee cannot take the leave requested. Employer must give the counter-notice to employee at least 1 week before the first day of proposed leave. Conversely, the employer cannot give counter-notice if the dates of leave have been earlier decided. Further an employer is separately entitled to give an employee notice to take leave on particular days and this can be useful in ensuring that holidays are taken in that period. It could be a question as to which days should be treated as workers statutory leave, the worker getting the statutory rate for the pay. Barton v SCC stated that holiday pay is a statutory right; the worker has the right to which of the days he should be paid at higher rate.
There is no term as to the entitlement for Bank or Public holidays. The Department of Trade and Industry stated, “There is no statutory right to take bank holidays off.” However in 2005, the Labour Manifesto vowed to extend the right to paid leave so that bank holidays are not considered as part of the leave. If the contract of employment states “in addition to public holidays”, then the employer cannot count the public holidays as part of the leave granted. The Regulations also provide guidance as regards entitlement to payment when the employee is on leave. However the problem still continues as to the inclusion of the eight bank holidays within the statutory entitlement to four weeks’ paid annual leave. This encouraged some employers to make reduction to the previous holidays entitlement usually in the contract. The Government was supposed to review the legislative provision in respect of bank holidays, and the entitlement to paid holiday under the Working Time Regulations. However, the Working Time (Amendment) Regulations 2007 stated that bank and public holidays would be included in the additional entitlement, Therefore now the workers are entitled to eight further holidays. This will be fully implemented by 9th April 2009.
An employee is entitled to payment for the annual leave at his normal rate of pay under Regulation 16. In Thames Water Utilities v Reynolds it was stated that section 2 of Apportionment Act 1870 should be applied in case of holiday pay, on which annual salary should be divided by the days in a year to calculate rate of pay for each day of leave. In Leisure Leagues v Maconnachie it was argued that the holiday be calculated by dividing the annual salary by number of working days in a year, but this was rejected by the EAT. It stated that if the rate of pay varies in case where pay includes commission, the normal rate of pay is taken by calculating the average rate over a period of 12 weeks considering the last complete week before the leave is granted, and same will be for the shift and rota workers where the number of hours per week varies and if no pay was due in any of the 12 weeks upon which pay is calculated, then the unpaid weeks are not considered and earlier weeks are brought into the calculation to bring the sum of 12 weeks.
As illustrated there was a problem of holiday pay in the UK from quite some time.There is still ambiguity as to holiday pay. This is open to exploitation; The Working Time Regulations should be amended and guidance should be given to clarify employers’ obligations in respect of holiday pay. Moreover even after the introduction of Working Time (Amendment) Regulation 2007 U.K workers still have fewer days off in comparison with other countries of the EU.
Employment Tribunal Procedure
After the WTR came in to place, if the worker believed that the employer refused to give permission to the worker to exercise his rights, the worker must initially submit his grievance in writing to the employer. If the matter is not resolved by the grievance procedure then the worker must adopt the employment tribunal procedure. If there has been any unauthorized deduction from wages under section 13 of ERA 1996 then the complaint must be made under section 23(3) from the date of last deduction. In List Design Group v Douglas it was said that according to the regulations the due pay for the holidays would be considered as unauthorised deduction of wages under section 13. The regulations were not intended to cover the children of schooling age as was supported by the case of Addison v Ashby many regulations which supported the children were overridden by the rules of Young Workers Directive and Young Persons Act 1993. The Regulations did not totally cover all workers and there were certain sectors, which were not covered by the regulations. Regulation 18 excluded the sectors where the Directive could not apply were air, rail, road, sea, inland waterway, lake transport, fishing and the activities of doctors in training. As in the case of Coleman and Others v Eddie Stobart the business was of road transport and the employee’s were a essential part of the business that fall in Regulation 18 and were excluded from the right to holiday pay. Further in Bowden and others v Tuffnells Parcels it was confirmed by ECJ that all workers related from the road transport sector were excluded from the scope of getting annual holiday pay. Regulations 13-16 would not apply to the workers who are concerned with the sectors of armed force, police or to the specific activities in the civil protection services, so as there is no right of annual leave for these workers which is quiet an injustice because their rights are not protected by the WTR coming into force and leave many areas of workers groundless. Under EU law, the Government has a lot time to implement these changes of EU Directive into national law, but no actions could be seen so far.
Many questions arose as to the relation between the annual leave and other leaves such as sick, maternity, paternity and adoption leave. There was much confusion as to the payment rates would vary between different types of leaves, while being on sick leave can the worker still have annual leave, whether a employee is still entitled to the annual leave if he falls sick at the time of the annual leave and take annual leave at any other time. There were different views to these questions, in some cases as Kigass Aero Components v Brown and Bold Transmission Parts v Taree the employment tribunal agreed that the workers while being on sick leave are also entitled to annual leave but on the other hand in Macredie v Thrapston Garage it seems to be that the workers already on sick leave are not entitled to annual leave, where as in 2002 Alan Johnson MP Minister for Employment stated that a worker is entitled to the annual leave under working time regulations while they are under the maternity or paternity leave. In CIR v Ainsworth the EAT again considered whether the workers on long-term, unpaid sick leave were entitled to paid holiday leave, the EAT gave permission to the Court of Appeal, the court of appeal held that the workers already on sick leave are not working and cannot be regarded as taking annual leave because as a matter of common sense a holiday can only be from ‘work.’ It also had to answer the question that whether EAT was right at deciding in Kigass that the workers who were on long term sick leave were still entitled to claim holiday pay, whether they were in course of employment or not, and does the workers were entitled to enforce holiday pay under WTR.
In this respect a regulations enforcement body should be established, to enforce the provisions (such as the rights to a written contract, to itemised pay slips, to statutory sick pay, and to maternity leave and pay, as well as the rights set out in the Working Time Regulations). This enforcement body should have power to investigate, follow-up and deal with third party complaints, keep random checks on employers, and to impose effective penalties in the event of non-compliance.
The DTI consultation paper also mentioned some of the difficulties posed out.
Taking of Odd Days
There is a problem as to the payment of these workers. There is uncertainty as to whether the entitlement to weekly paid leave applies to the taking of odd days. This uncertainty would overcome if the WTR rules on payment were to apply to a greater ratio of the employee’s leave entitlement than the current 20 days and might lead to significantly increased cost. Under the Working Time (Amendment) Regulations 2007 which came into enforce states that the full time workers will have their holiday entitlement increased from a minimum of 20 days paid annual leave, to 24 days and then to 28 days from 1st April 2009. This means that the workers will now have 20 days of paid holiday in addition to eight bank holidays. This increases the workers holiday entitlement to 40% and 3% increase in wage costs for some workers.
Over 300 Citizens Advice Bureaux (CABx) throughout England, Wales and Northern Ireland carried out a research over the regulations of the WTR that whether after the implementation of the regulation are the workers getting their rights. It could be seen that many working were denied to their statutory right for the four week holiday leave, many of them low paid workers are still not enjoying their right to four weeks’ paid holiday per year. In some cases, this failure is due to the lack of awareness or full understanding of the Working Time Regulations. Often it stems from deliberate non-compliance, with employers using excuses and devices to avoid meeting their statutory obligations to their workforce. The employer usually states that the worker does not qualify because he or she is “only” a part-time worker or that there is no paid holiday in work, claiming simply that the employer cannot afford to give paid holiday, and will make inadequate adjustments to workers’ pay in actual paid holiday. On the other hand many employers have made changes to the contracts as suiting to them. Due to the shortcomings in the regulations many workers from transport sector find that they have no statutory right for the annual paid leave at all. Where the employee knows that the employer is not giving his right he/she is reluctant to bring a complaint to the employment tribunal because he/she has fears of suffering victimization by their employer and even of losing their jobs. The fear of losing job prevents or deters many distressed workers from taking remedial action to enforce their right to paid holiday. A review of the arrangements should be carried out to ensure compliance with the provisions of the Working Time Regulations and with other statutory employment provisions as well.
To overcome the difficulties and providing the employee’s their rights the DTI commission should research on obedience with the Regulations in the UK economy as a whole. This research should then inform governmental action to promote awareness and achieve higher rates of compliance. The review should give a consideration to workers particularly facing the statutory rights difficulties and attaining their rights as a part time, agency worker, self employed or temporary workers. Even after the enforcement of Working Time (Amendment) Regulations 2007 this issue was not properly dealt and still there are there are ambiguities related to it.
Therefore it appears that the Working Time Regulations have many uncertainties as to the application. In particular the calculation of holiday pay for different workers is a complex issue. The connection between the provisions regarding holiday pay and other rights provided by the Regulations has also been an issue, Also, upon termination, the worker is entitled to a payment and so calculating the amount by the employer also is a problem
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