Employment Law E-Bulletin – Issue 88

• New family focused legislation receives HRH stamp of approval
• A contractual term on the payment of holiday on termination cannot result in a payment which is lower than the statutory minimum – Connor v Chief Constable of the South Yorkshire Police [2023] EAT 42
• The decision makers motivation in a discrimination case is key – Alcedo Orange Ltd v Ferridge-Gunn [2023] EAT 78

New family focused legislation receives HRH stamp of approval

The Carer’s Leave Bill, The Neonatal Care (Leave and Pay) Bill and The Protection from Redundancy (Pregnancy and Family Leave) Bill recently received royal assent. This means they become:

The Neonatal Care (Leave and Pay) Act

This will afford up to 12 weeks of paid neonatal care leave for employed parents whose children are admitted to neonatal care. This 12-week period will be in addition to other statutory leave available.

The Carer’s Leave Act 

This creates a new statutory unpaid leave entitlement of one week for employees who are caring for a dependant with a long-term care need. This will be a day one right which is in addition to other statutory leave.

The Protection from Redundancy (Pregnancy and Family Leave) Act

This extends the current protections afforded under statutory provisions for Maternity Leave, Adoption Leave and Shared Parental Leave to cover pregnancy and a period of time after a parent has returned to work.

Points to note:

Secondary legislation is needed to fully implement the new legislation and the timescales are somewhat loose. For employers, it will be key to ensure any internal policies are in line with the updated legislation and that the necessary staff are brought up to date with this. Further updates will be provided when we have more information.

A contractual term on the payment of holiday on termination cannot result in a payment which is lower than the statutory minimum – Connor v Chief Constable of the South Yorkshire Police [2023] EAT 42

The EAT has considered the correct approach to calculating pay for accrued statutory holiday on termination of employment, and whether, under a contractual term, a worker could receive less than the amount they would have been paid had they taken this during employment.

Mr Steven Connor (the “Claimant”) was employed by Chief Constable of the South Yorkshire Police between 1 November 2002 and 29 May 2020 when he was dismissed. Upon termination he was entitled to be paid in respect of accrued and untaken holiday after spending a year on sick leave. However, his contract contained the following term:

“Employees may, on termination of employment, be entitled to payment for untaken annual leave or for other accrued time off. Advice on such entitlement obtained from HR Shared Service in the first instance. Payment will be based on 1/365th of annual salary for each day’s leave. Any payment will be subject to the usual statutory reductions.”

The effect of this term meant that upon termination of his employment, the Claimant received a lower payment for accrued holiday than he would have received using the calculation set-out in the Working Time Regulations 1998 (“WTR”).

On termination of employment, a worker is entitled to pay in lieu of unused statutory holiday. The WTR provides that this can be provided for in a “relevant agreement” and where there is no such agreement, it provides a specific formula to use to calculate any sums due.

The Claimant brought an unlawful deduction of wages claim and in the first instance, the Employment Tribunal held that the contractual term was part of a ‘relevant agreement’ for the purposes of the WTR, and the calculation was therefore correct.

On appeal, the Employment Appeal Tribunal disagreed, holding that a ‘relevant agreement’ under the WTR cannot result in a payment which is lower than that which would be calculated using the formula provided by the WTR. The Claimant was entitled to the higher amount.

Points to note:

This is a valuable reminder that statutory provisions take precedence over contractual terms when it comes to setting the baseline. Contractual provisions will always be subject to any relevant statutory minimums. They can provide greater, but not lower, entitlements.      

The decision makers motivation in a discrimination case is key – Alcedo Orange Ltd v Ferridge-Gunn [2023] EAT 78

In this case the Employment Appeal Tribunal (“EAT”) considered whether an act carried out by an employee could be discriminatory on the basis of someone else’s motivation.

Mrs Ferridge-Gunn (the “Claimant”) was employed by Alcedo Orange Limited. Shortly after the commencement of her employment, the Claimant informed her line manager that she was pregnant. Performance concerns were raised by her line manager and the Managing Director before and after this. She was absent with morning sickness and her line manager found that she had not processed certain documents, leading the line manager to tell the Managing Director that the Claimant had misled her about her performance. The Claimant’s employment was later terminated for poor performance.

The Employment Tribunal upheld the Claimant’s claim of pregnancy discrimination, finding that the information the manager communicated to the Managing Director had been motivated by the Claimant’s pregnancy. The Claimant had therefore been dismissed because of her pregnancy or a pregnancy-related absence.

The EAT allowed the appeal. The Tribunal had not been referred to the case of Reynolds v CLFIS (UK) Ltd [2015] EWCA Civ 439 which held that liability for a discriminatory dismissal can only arise where the employee who carried out the discriminatory act was motivated by a protected characteristic of the dismissed employee. An act cannot be discriminatory on the basis of someone else’s motivation. In this case analysis was required as to whether this was the Managing Director or the line manager’s decision, and if it was the Managing Director’s decision, whether he was motivated by the Claimant’s pregnancy. The case was remitted to the employment tribunal.

Points to note:

This is a useful reminder that a decision-makers motivation is key when an employment tribunal considers a discrimination case. This differs from dismissal following whistleblowing where the Supreme Court has confirmed that where the real reason for a dismissal is hidden from the decision maker behind an invented reason, the hidden reason can be attributed to the employer.