HMO Quarterly Employment Bulletin – March 2016

HMO Quarterly Employment Bulletin – March 2016


Holiday Pay

There are now two time limitations upon a worker bringing a claim for a short payment of holiday pay. The first limits the shortfall to that which has occurred for up to a two year period.

The second limitation in time is that it is too late for a worker to bring claim at all if three months has passed since the last short payment complained of.

European directives (at present!) take precedence over domestic enactments of those directives if domestic legislation gives a lower level of protection or entitlement than the directive. Decided cases interpret the directives and so put flesh on the bone. From these cases the general principle has been established that the holiday pay must “reflect normal pay”. These cases have decided that one off bonuses do not amount to normal pay.

Examples of normal pay, according to the Courts, are:

  • on call payments;
  • piecework premiums;
  • overtime;
  • commission.

UK entitlement to holidays exceeds the European minimum by 1.6 weeks (5.6 rather than 4 weeks). An employer in this Country, therefore, is entitled to take into account the type of payments listed above in calculating normal remuneration only in respect of the first four weeks of holiday taken and in respect of additional holiday under domestic law to ignore the “extras” such as commission payments.

The above deals with the minimum position at law and employers should always remind themselves of the contents of the agreement between themselves and their workers before limiting holiday pay to the statutory minimum.

Zero Hours Contracts

The law relating to zero hours contracts has been changed with effect from 11 January 2016. Protections for workers and employees have been brought in by The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.

The background is that many employers, for example in the retail sector recruit individuals for casual work on zero hours contracts. This describes a contract under which an employer is not obliged to offer, and the individual is not obliged to do, any work. So no hours may be offered for work with there being any breach of the agreement. Zero hours contracts are popular because employers gain flexibility in the face of changing market conditions.

Employers have attempted to have their cake and eat it by making zero hours contracts exclusive. They do this by including terms which prevent the employee from working for anyone else, despite the fact that the employer is not bound to offer even one hour of work.

Following a ground swell against exclusive zero hours contracts, the legislation now:

  • allows exclusive zero hour contracts but only if the rate of pay for each hour worked under the contract exceeds £20;
  • allows workers under a zero hours contract not to suffer “detriment” because a worker has worked elsewhere;
  • allows a worker in a zero hours contract to go to the Employment Tribunal if they have suffered a detriment;
  • enables a Tribunal to find that there has been a detriment and award compensation.

As soon as an employee enters into an exclusive zero hours contract he gains the entitlement to complain to a Tribunal for detriment. The complaint does, however, have to be brought within three months of the detriment complained of (or the last if there has been a series of acts amounting to detriment). If an employer dismisses an employee for a breach of an exclusivity term in a zero hours contract, then that dismissal is automatically unfair. Furthermore, the normal qualifying period of two years employment before an employee can complain if unfair dismissal does nit apply in this case.

These changes coupled with changes in the burden of proof which operate in favour of the employee and against the employer send a clear message that attempts by employers to rely upon zero hours contracts containing exclusivity clauses, will prove costly to errant employers.

For assistance upon employment law issues your contact at Hand Morgan & Owen will be Patrick Nelson, Associate Solicitor, on 01785 211411 or email

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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. the law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. (50587)

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