Employment Law E-Bulletin – Issue 82

  • Changes to ‘Fit Notes’ – new regulations allow an increase in medical professionals to sign off such forms
  • Rent plus UK Ltd v Coulson [2022] EAT 81 – 25% uplift applied for failure to follow the Acas Code in sham redundancy
  • Harper Trust v Brazel [2022] UKSC 21 – no more 12.07% pro-rated holiday pay for casual workers

Changes to ‘Fit notes’ – new regulations allow more medical professionals to sign off

Changes to regulations now allow further healthcare professionals to sign individuals off as unfit to work for the purposes of Statutory Sick Pay (“SSP”) and social security claims.  As of 1 July, the Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) (No.2) Regulations 2022 amended the Social Security (Medical Evidence) Regulations 1976 and the Statutory Sick Pay (Medical Evidence) Regulations 1985.

This change allows registered nurses, occupational therapists, pharmacists, and physiotherapists to sign ‘fit notes’ as opposed to just GPs. Although this change has been introduced to try and reduce the workload of GPs, it could mean employers see an increase in fit notes now that the range of medical professions allowed to sign such notes has increased.

Rentplus UK Ltd v Coulson [2022] EAT 81 – 25% uplift applied for failure to follow the Acas Code in sham redundancy.

Ms Coulson (the “Claimant”) was employed by Rentplus UK Ltd (“Rentplus”) as Director of Partnerships, and was a member of the leadership team from 2015.  A decision was taken to dismiss her in March 2017, something she was unaware of at the time. Following a decision by Rentplus to commence a reorganisation, the Claimant attended consultation meetings in April and May 2018. She submitted a grievance in June 2018 claiming the assessment of her role as redundant was inaccurate and that she had been marginalised by Rentplus since late 2017. Her grievance, and appeal against the grievance, were dismissed and her employment was terminated in August 2018.

The Claimant brought claims for unfair dismissal and direct sex discrimination. The Employment Tribunal (the “ET”) agreed with the Claimant that her dismissal was unfair and that the consultation meetings were a sham as the decision to dismiss had been taken long before. They noted the decision to dismiss the Claimant had been taken some time before and that there were facts from which it could infer sex discrimination.

Where an employer has failed to follow the Acas Code of Practice on Disciplinary and Grievance Procedures (the “Code”) and the tribunal considers that the failure was unreasonable, the tribunal may increase the amount of compensation that would otherwise have been payable to an employee by up to 25%, if it considers it just and equitable do so. This is provided for by section 207A, Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).

The ET awarded a 25% uplift for failure to follow the Code due to the claim succeeding and the failures being so “egregious”. Rentplus appealed, claiming that the ET had erred in concluding hat the Code applied where Rentplus’ reason for dismissal was redundancy even though the ET held the reason was sex discrimination, and that the failings by Rentplus, against which the uplift was being made, should have been identified by the ET with reference to the specific parts of the Code that had been breached.

The Employent Appeal Tribunal dismissed the appeal and held that an employer cannot avoid the application of the Code by pretending a dismissal that results from misconduct or poor performance is for another reason, such as redundancy.

It provided guidance for tribunals when considering whether to apply an Acas uplift. This was in the form of the following series of questions taken from 207A of TULRCA:

  • Is the claim one which raises a matter to which the Acas Code applies?
  • Has there been a failure to comply with the Acas Code in relation to that matter?
  • Was the failure to comply with the Acas Code unreasonable?
  • Is it just and equitable to award an uplift because of the failure to comply with the Acas Code

and, if so, by what percentage, up to 25%?

Points to note:

This case is a useful reminder that the Code can apply even where dismissals are not so obviously related to disciplinary matters or grievances. In this case the tribunal looked behind the redundancy reason for dismissal put forward by Rentplus.

Employers should carefully consider the reason for any dismissal and ensure they have evidence which supports this. Consideration should also be given as to whether the Code applies in the specific situations they are dealing with as a failure to follow this could result in a 25% uplift to compensation.

Harper Trust v Brazel [2022] UKSC 21 – no more 12.07% pro-rated holiday pay for casual workers

Ms Brazel (the “Claimant”) was employed as a music teacher in a school run by the Harpur Trust (the “Trust”), and she worked irregular hours over the academic year. She was employed on a permanent contract under which she was entitled to 5.6 weeks’ paid holiday.

Up until September 2011, the Trust had calculated the Claimant’s 5.6-week holiday entitlement by calculating her average week’s pay in accordance with section 224 of the Employment Rights Act 1996 (the “Act”) and multiplying this by 5.6. This involved taking the Claimant’s average weekly pay (which at the time was the average week’s pay in the period of 12 weeks preceding the date of leave) and ignored any weeks in which she did not receive any pay due to no hours being worked. This was known as the ‘Calendar Week’ method.

In September 2011, the Trust changed the way it calculated the Claimant’s holiday pay. Rather than identifying her average week’s pay, it identified the number of hours worked in the 12 weeks preceding the date of leave, even if this included vacant weeks without work and pay. From the hours worked, 12.07% of those hours were then multiplied against the Claimant’s hourly rate (£29.50) to arrive at her holiday pay. 12.07% is essentially the proportion that 5.6 weeks of annual leave bears to a total working year of 46.4 weeks. This is known as the ‘Percentage Method’ and resulted in a decrease in the Claimant’s holiday pay.

In 2017 the Claimant brought a claim for unlawful deduction of her wages. Although her claims were dismissed in the first instance by the Employment Tribunal, she appealed to the Employment Appeal Tribunal which found in her favour. The Court of Appeal reached a similar conclusion, confirming that the statutory entitlement to holiday pay required the use of the Calendar Week method, even if this did produce absurd results. The Trust appealed to the Supreme Court.

The Supreme Court dismissed the Trust’s appeal and confirmed the position given by the Court of Appeal. The Trust argued that the Percentage Method should have been applied to enable holiday pay to reflect the amount of work performed by the Claimant. It stated that the Working Time Regulations 1998 and the Act require the Calendar Week method to be used to identify a week’s pay to calculate holiday pay, even if this favoured workers who worked irregular hours.

Acknowledging that there could be ‘absurd’ results, the Supreme Court dismissed the appeal for substantially the same reasons as the Court of Appeal.

Points to note:

The Percentage Method has been clearly rejected by the Supreme Court and should therefore no longer be used by employers.

Although this judgement applies to all workers, practically it effects workers working irregular hours and who work part of the year. It may have far reaching implications for employers who engage such staff as it won’t just apply to the education sector. If someone is employed for the whole of the year, but only works for part of it, they are entitled to 5.6 weeks’ holiday. Employers should use the Calendar Week method (as set out above, albeit with a 52 week reference period now) to calculate holiday pay for workers who work in this way. In this calculation weeks where no payment has been made to a worker must be disregarded, and earlier weeks taken into account in order to cover 52 weeks.

Ensuring workers, who are entitled to receive 5.6 weeks’ paid holiday, do not receive less than their entitlement will be important to avoid similar claims as seen in this case. It will be prudent for employers to review their holiday pay calculation practices to ensure against any potential underpayments. Employers may also consider if in certain circumstances, fixed term contracts may be more appropriate where only small amounts of work are to be carried out. However, it is important to be aware that employees who have been continuously employed for four years or more on a series of fixed term contracts will be automatically deemed to be permanent employees unless the continued use of a fixed-term contract can be objectively justified. It is also important to be aware that a gap between contracts will not necessarily break continuity of employment.

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