Should voluntary overtime be included in the calculation of holiday pay?

Yes, according to the employment tribunal in Brettle and ors v Dudley Metropolitan Borough Council.

The EU Working Time Directive provides that Member States must ensure that workers have the right to at least four weeks’ paid annual leave.  The Directive does not say how statutory holiday pay should be calculated, theoretically leaving this to national legislation or practice. However, according to the European Court of Justice (ECJ) ‘paid annual leave’ means that workers should receive their ‘normal remuneration’ when taking their annual leave entitlement. In British Airways plc v Williams and ors the ECJ held that a worker on holiday is entitled not only to basic salary, but also to other remuneration which is intrinsically linked to the performance of the tasks which he is required to carry out under his contract of employment.  This reasoning has since been used in other decisions so as to include commission payments and both guaranteed and non-guaranteed overtime, the latter arising where there was no obligation on the employer to provide overtime but if it was available the worker was obliged to perform it.  This has left open the position in respect of purely voluntary overtime where an employer is not obliged to offer overtime and a worker is not obliged to undertake it.

In the case of Brettle and ors v Dudley  Metropolitan Borough Council, a group of workers, who carried out housing repairs for the Council, claimed that they had not received the correct statutory holiday pay and should have received additional sums in respect of voluntary overtime, standby and call-out payments.  They worked different shift patterns with varying degrees of frequency as to overtime.  The tribunal held that a worker should not be deterred from taking annual leave and the question to be asked in each case was “What is normal pay?”  It decided that the overtime payments were part of the claimants’ normal pay except in the case of one, who rarely carried out overtime other than in the event of a major emergency. The tribunal reached a similar conclusion regarding standby allowances and call-out payments. However, the tribunal made clear that these additional payments only had to be factored into the calculation of holiday pay in relation to the four weeks’ basic annual leave under Regulation 13 of the Working Time Regulations 1998.  Pay for additional leave under Regulation 13 A (being the extra statutory 1.6 weeks introduced in 2007) and any additional contractual leave should be calculated as before and it concluded that it is for the employer to decide when Regulation 13 holiday should be taken though, in the absence of a stipulation to the contrary, it is common sense for it to be taken first in the leave year with the additional Regulation 13A leave to be taken afterwards.

Although this is only a tribunal decision and therefore non-binding, it sheds light on the question of what constitutes ‘normal remuneration’ and supports the view  that payments normally received are part of normal remuneration as a result of which regular  voluntary overtime, standby and call-out payments should be included.

Has an employee ever asked you if they can change their hours of work?

Recently, we were asked the following question in relation to a GP Practice:

Q. One of our receptionists wants to come in later as she needs to drop her child to school. I am sympathetic as she is an excellent worker but I need her to answer phones as 8a.m. is our busiest time, plus I am worried about setting a precedent for other staff.  How should I handle the situation?

This is a summary of our reply:

A. If the employee has at least 26 weeks’ continuous employment, she should be told that she has the right to make a request to change the times when she is required to work under the statutory scheme to request flexible working provided she makes the request in writing and in compliance with the application information requirements under the scheme (see below).

Although the right is generally viewed as a right to request a permanent change to the employee’s contractual terms of employment, if she only requires a temporary change, in making her request, she can state the duration of the desired change. Only one request may be made under the statutory scheme in any 12 month period so if her request is approved, she would not be able to request another variation under the scheme for a period of 12 months (although she could still ask you without the statutory right).

The employee’s application must be in writing, setting out:

  • The date of the application, the change to working conditions she is seeking and when she would like the change to come into effect.
  • What effect she thinks the requested change would have on you as her employer and how, in her opinion, any such effect might be dealt with.
  • That this is a statutory request and if she has made a previous application for flexible working, the date of that application.

Once you have received her written request, you will have a three month decision period within which to consider the request, discuss it with her and notify her of the outcome. You are required to deal with the request in “a reasonable manner” and although there is no statutory definition of what is reasonable, the Acas Code suggests that the employer should arrange to talk with the employee as soon as possible after receiving the request unless the employer intends to approve the request, in which case a meeting will not be necessary.  Tribunals have been critical of employers who appeared to be more concerned to explain why a requested working pattern could not work rather than investigating how it could be accommodated so it is important when discussing the request with the employee to start from a “positive” perspective with a view to trying to overcome potential issues.

In this case, there is a concern that by agreeing to the request, you would be setting a precedent for other staff and it is true that decisions concerning flexible working requests should normally be made consistently.  However, inconsistent decisions can be made if there is a reason, such as that the organisational capacity for flexible working has been reached and that to grant any further requests would undermine the business. Often, a sensible way forward for the parties, is to agree a trial period.

Although there is no statutory right for the employee to be accompanied at any meeting, the Acas Code recommends that in order to deal with requests in a reasonable manner, the employer should allow employees to be accompanied by a work colleague and that the employee should be informed of this prior to any discussion.

In deciding whether to accept the request, you will have to weigh the benefits of the requested change for the employee (and, in this case, possibly for your business since you say she is an “excellent worker” and she might leave if her request is not accepted) against any adverse business impact, including possible costs and potential logistical implications. You should let her have your decision in writing as soon as possible.

If you accept the request or reach agreement on a variation of the request after discussion, the new work pattern will be a contractual variation to the employee’s employment and will be permanent unless otherwise agreed, for example by way of a trial period  or a time-limited change after which she reverts back to her original working pattern.

If you reject the request, it must be only for one or more of the following grounds:

  • the burden of additional costs;
  • detrimental effect on ability to meet customer demand;
  • inability to reorganise work among existing staff;
  • inability to recruit additional staff;
  • detrimental impact on quality;
  • detrimental impact on performance;
  • insufficiency of work during the periods the employee proposes to work;
  • planned structural changes.

The test is a subjective one so if you consider that one of the grounds applies, then the test is satisfied and the employee could only challenge your decision if your view is based on incorrect facts.  In this particular case, you may be inclined to reject the request on the ground that it will have a detrimental effect on ability to meet customer demand but if there is a receptionists’ rota, it might first be worth enquiring whether any other member of the receptionist team would be willing to swap their hours.

Although there is no statutory requirement to include an explanation as to why a particular ground applies, it would always be good practice and sensible to do so, particularly as the Acas Code suggests that the employee should be allowed to appeal against the rejection of their request and may be seen in many cases as an essential part of dealing with a flexible working request in “a reasonable manner”.  In addition, an employee who has received a clear and credible explanation of why their request cannot be accepted and, where appropriate, an alternative cannot be found is more likely to remain an engaged member of the employer’s workforce and less likely to challenge the decision.

Although it has been suggested that the statutory right to request flexible working lacks teeth because any redress under the statutory scheme for an employee whose request is rejected is limited, employers should be aware that where an employee seeks to vary their hours to accommodate childcare commitments, the employee may also bring a claim for indirect sex discrimination on the basis that more women than men are likely to combine paid employment with child caring responsibilities.  Even then, you may be able to show, on the facts of this case, that working certain hours is objectively justified because 8 a.m. is your busiest time.  Fundamentally, whereas the legislation governing the statutory right to request flexible working offers little scope to examine the commercial rationale, in a claim for indirect sex discrimination the reason why the decision has been reached is fundamental to establishing whether the decision can be justified.

Finally, if the employee has less than 26 weeks’ continuous service, it should be noted that there is nothing to stop her making an informal request to change her working pattern and although the statutory scheme will not apply, she could still have an indirect sex discrimination claim if her request is rejected.  Accordingly, you may like to deal with it in a similar way to a request under the scheme in order to remain consistent.

Finchley solicitor contributes to Amsterdam seminar on child abduction

A Partner at Finchley-based OGR Stock Denton LLP has contributed to a seminar in Amsterdam on English law relating to child abduction.

Peter Martin is a founder and board member of the Child Abduction Lawyers Association, who were invited by a Netherlands-based organisation of Family lawyers to present a seminar on child abduction issues and the voice of the child in family proceedings..

He said: “I was delighted to be able to take part in the seminar and to help provide information to colleagues in the Netherlands as part of a dialogue on this international problem.”

“The Dutch lawyers present were particularly fascinated by the powers that the English High Court has for helping to find the child in the initial stages and the fact that the detective work is largely carried out by the lawyer instructed with the assistance of High Court Orders that can be obtained against public bodies for disclosure of information.

“They were also highly impressed at the speed at which English lawyers are able to work on these types of cases which ensures that the six week target from instructions to final hearing is often met.

“We also had a very interesting exchange of information and a discussion about how the voice of the child is brought into proceedings in England as well as in the Netherlands.

“This was a valuable exercise for everyone who took part.”

A total of 35 lawyers from the UK and Netherlands took part in the seminar on 26 September.

Lawyers raise hundreds for Macmillan with Coffee Morning

Staff at Finchley-based solicitors, OGR Stock Denton LLP, have raised more than £400 for Macmillan after holding a Coffee Morning and a series of fundraising events.

As part of the charity’s Coffee Morning initiative, Trainee Solicitor Lauren Gaines organised a day dedicated to fundraising for Macmillan through various activities including a ‘dress down day’, a bake sale and a ‘quirky quiz’.

Staff were encouraged to put their baking skills to the test to create a spread to be proud of. There was stiff competition for the star baker award, but after much deliberation it was decided that both Secretary, Geeta Lynch’s, carrot cake and Paralegal, Sonia Chadni’s, peanut butter brownies were deserved winners.

This was the third year running that staff at OGR Stock Denton have taken part in what is now the world biggest coffee morning.

OGR Stock Denton Managing Partner, Richard Denton said: “I’m delighted that we’ve been able to raise so much for Macmillan. Lauren and the team did a great job in organising and participating in these activities and, as Partners, we were very happy to be able to contribute.

“Here at OGR Stock Denton, we’re always looking to make a positive contribution, and what better way to do so than by raising funds for the vital work of Macmillan?”

Macmillan Coffee Mornings took place across the UK to raise funds for Macmillan’s work with people facing cancer. In 2015, the event raised a total of £25 million. Since the first event in 1990, Macmillan Coffee Morning have raised more than £138 million for the charity.

To make a donation to Macmillan, please click here: https://donation.macmillan.org.uk/wbcm/payin#.VS5wUdzF9FU

Homeowners falling foul of the law by renting homes out online

A court has found that thousands of homeowners who rent out property on short-term contracts through services like Airbnb are likely to be in breach of the law.

A ruling by the Upper Tribunal’s Land Chamber has revealed that homeowners whose leases state their properties can be used ‘as a private residence only’ cannot rent out their homes short-term.

Many leases in the UK contain a ‘private residence only’ clause which prevents the home from being sublet – meaning an estimated four million leaseholders in Britain may be affected.

The ruling on leaseholds was brought to court following a dispute between a Slovakian property developer and her neighbours at a housing development in Enfield, North London.

Neighbours had become concerned about strangers regularly staying in the flat owned by Iveta Nemcova’s and had asked the block’s freeholder to take action.

In court, Ms Nemcova admitted renting out her property on websites such as Airbnb, TripAdvisor and holidaylettings.com – as well as on her own private holiday lettings site.

In court, she argued that she had remained within her lease’s ‘private residence use’ clause, having paid council tax and bills and lived there “three or four days a week”.

She also pointed out that her lease contained no explicit bar on her charging people to stay in her flat short-term while she wasn’t staying there.

However, in his ruling Judge Stuart Bridge, said: “In order for a property to be used as the occupier’s private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week.

“Granting very short-term lettings (days and weeks rather than months) [….] necessarily breaches the covenant [not to use the property as anything other than a private residence].”

The tribunal’s ruling will not affect people who rent out rooms while they too are staying in the property, but it will affect people who rent out whole properties on a short-term contract.

Leaseholders have been warned to immediately check their lease if using holiday letting services to avoid breaching the law.

A breach of the law can lead to legal proceedings; with the homeowner being forced to pay legal costs and/or forfeit their lease, therefore potentially losing their home.

Link: Upper Tribunal Land Chamber’s Ruling

Civil partnerships have halved since same-sex marriage law

New figures from the Office for National Statistics (ONS) have revealed that the number of new civil partnerships formed last year was 49 per cent down on the previous year as same-sex couples opt for marriage instead.

In 2015, 861 new partnerships were made, compared to a significantly higher 1,683 in 2014. This came after The Marriage (Same Sex Couples) Act legalising same-sex marriage in England and Wales came into force in March 2014.

The overall rate at which new civil partnerships are formed has now fallen by 85 per cent since 2013.

Around 48 per cent of the new partnerships formed last year were made between older couples aged 50 or over, this compares to just 20 per cent before the introduction of same-sex marriage.

Around 66 per cent of civil partnerships in 2015 were between men – the highest proportion since the partnerships were introduced in 2005.

However, the equivalent of divorce for civil partnerships, known as dissolution, has also increased by 14 per cent over the previous year to 1,211 during 2015.

Elizabeth McLaren of the ONS said: “Dissolutions are likely to reduce in the future as more same-sex couples form marriages instead of civil partnerships.”

Link: ONS statistics on Civil Partnership

Women not as successful at acquiring pay rises

A new study has revealed that women are less likely to secure a pay rise than men, despite asking their managers as frequently for a wage increase.

It has long been suggested by some parties that women are not paid as much, or the same as men, because they are not willing to ask for a pay rise.

However, research conducted by the Cass Business School, Warwick University and the University of Wisconsin in America has dispelled this myth with its new findings.

Their study of 4,600 workers compared the earnings of full-time males with full-time females, and part-time males with part-time females and found that men were 25 per cent more likely to get a pay rise when they asked.

The research also concluded there was no evidence for the idea that women were reluctant to ask for a salary increase because they were more wary of damaging relationships with their managers, or deviating from ‘typical’ perceived stereotypes.

The data for the study came from the Australian workplace relations survey, which is thought to be the only national study to systematically record whether employees have asked for a pay rise.

Andrew Oswald, professor of economics and behavioural science at the University of Warwick, said: “The fact that women don’t ask for pay rises as often as men is a popular theory. It’s a very common thing for women to say and believe, but all of the evidence is anecdotal, so it’s very hard scientifically to do a proper test of this.”

He believes one possibility was that men who failed to get a pay rise kept their failure to themselves, whereas women “were more straightforward and tell their friends”.

“Having seen these findings, I think we have to accept that there is some element of pure discrimination against women,” Prof. Oswald added.

“It could be that Australia is odd. But it’s a modern industrial economy halfway in character between Britain and the US, so I think that’s unlikely.”

The study also found that both women and men under 40 were asking for and receiving pay rises at the same rate, which the researchers said could mean that negotiating behaviour had started to change.

Dr Amanda Goodall from Cass Business School added: “The study potentially has an upside. Young women today are negotiating their pay and conditions more successfully than older females, and perhaps that will continue as they become more senior.”

Link: Cass Study

Finchley-based law firm expands with trio of new appointments

Finchley-based OGR Stock Denton LLP is expanding, with the appointment of three new staff.

Leidy Gomez joins the firm as a Solicitor, Suja Sukumaran joins as Paralegal in the Private Client Department, while Lauren Gaines is beginning her training contract, having previously worked as a Paralegal in the firm’s Private Client Department.

The three new appointments represent an expansion for the firm and come ahead of its forthcoming move to larger offices.

Richard Denton, Managing Partner for OGR Stock Denton said: “We’re delighted to welcome Leidy and Suja to the team and Lauren to her new role. They bring with them a variety of experience and our clients are sure to value their input.

“Leidy, Suja and Lauren take up their new roles at an exciting time as we make the move to new offices, enabling us to deliver first-rate services to even more clients.”

Firms find a marvellous way to mix

The partners at OGR Stock Denton were delighted to welcome members of the team from Glazers Chartered Accountants to a cocktail-making workshop earlier this week.

The event took place at Tintico Coffee, Finchley, on Wednesday evening, with teams set the task of mixing two drinks following a demonstration by one of the experts.

It was a great night for staff from both firms, who enjoy a close working relationship and enjoyed the chance to “mix” away from work.

There was also a competition to determine the best cocktail, which was won by OGR Stock Denton’s Richard Denton, Sonia Chadni and Darren Specterman from Glazers.

Richard Denton, Managing Partner for OGR Stock Denton said of the event ‘It couldn’t have gone any better and was a great way to develop our working relationship with Glazers. The feedback was overwhelmingly positive and everyone had a great time.

‘We very much value the relationship we’ve built with Glazers over the years and we look forward to continuing working with them in the future.’

Individuals should be mindful of Inheritance Tax reliefs

The rising value of house prices in the UK means that an ever growing number of people are finding that their estates are liable to Inheritance Tax (IHT). A recent study revealed that the amount of revenue that IHT generates now stands at £4.72billion (up from £2.47billion in 2010).

With this in mind, it is important that individuals are aware of the various tax reliefs which may limit their estate’s liability, not least those which relates to losses on the sale of assets.

If any investments or land which are included in an estate are subsequently sold for less than their probate value, then their personal representatives may be able to claim relief.

The relief works by enabling the personal representative to substitute the sale price for the probate value and to claim a refund on the difference.

It is important to bear in mind that the system for relief operates differently depending on whether the losses incurred relate to the sale of land or quoted shares.

For the relief to apply, shares must be sold within one year of the date of death and the land within four years.

Before applying for either relief, it is important to have done the necessary calculations to ensure that it is the best course of action.

For further information about Inheritance Tax (IHT) or should you need any advice please contact Geoff Dennis, Senior Associate in our Private Client team on 020 8349 0321 or by email.