Scotsman legal review: Employment

Holiday pay remains an issue for employment law specialists

Holiday pay remains an issue for employment law specialists

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Working through all the options: holiday pay, parental leave and tribunal fees top agenda

Holiday pay and the Scottish government’s intention to abolish tribunal fees in Scotland have been high on the agenda for employment law specialists this year.

The Bear Scotland & Ors vs Fulton & Ors case gained huge publicity around the time of the Employment Appeal Tribunal (EAT) ruling on holiday pay and overtime in November 2014 and this was just the latest in a long line of cases that looked at what must be included in holiday pay under the UK’s working time regulations.

One year on, lawyers specialising in employment law say the issue is still live. With effect from 1 July, 2015, the government put a backstop on claims of two years.

This was considered by those working in the sector to be a major decision in terms of recent changes to employment law.

“Holiday pay continues to be an issue,” says Morag Hutchison, employment partner at Burness Paull’s Edinburgh office.

“We are continuing to see a lot of holiday pay claims coming through but many are being put on hold by the tribunal pending a decision in Lock vs British Gas.”

Another major change was the decision that as of 1 April, 2015, mothers and fathers have the right to share parental leave.

“That’s been a really interesting development,” says Hutchison.

This latest change is not without its challenges. Mothers and fathers can now divide up the paternal leave on a weekly basis, which, if implemented by an employee, could present employers with a less than ideal situation in terms of working patterns.

“The social policy behind the legislation is admirable but it’s quite difficult for a business to operate from a practical point of view,” says Hutchison.

“It has potential to be disruptive for businesses. Many of our clients are concerned about the operational complexities involved. There’s a lot of concern about it from an HR practitioner’s point of view.

“The other thing I think that’s really interesting about parental leave is the question of whether or not an employer should offer enhanced pay to a father taking parental leave if they offer enhanced maternity pay to mothers.

“The Government’s view is that it would not be discriminatory to offer enhanced maternity pay but not offer enhanced parental pay but this is an issue that could be challenged.

“From a client point of view that’s been one of the biggest concerns.”

The changes surrounding shared parental leave are by no means over. On 5 October, Chancellor George Osborne announced a major extension to shared parental leave and pay to include working grandparents. The government aims to implement the new policy by 2018.

Sandy Kemp, partner in employment and pensions at Clyde & Co (formerly Simpson & Marwick), says for his part he has yet to see many people make use of the regulatory change. “Sometimes these things take some time to warm up. The initial indicators are that it’s not really going to make a big difference,” he says.

Based in Clyde & Co’s Aberdeen office, Kemp has witnessed first hand the increased workload for employment law specialists as a result of the low oil price but contrary to the media hype, it’s not just redundancies that’s keeping law firms busy.

“It has also been restructures, changing duties, working patterns. Much of the industry is changing from a pattern of two weeks on, three weeks off to three weeks on, three weeks off, or some equivalent pattern, says Kemp.

“It’s a need to reduce costs. The price of a barrel of oil has collapsed. It’s low and it’s predicted to stay low for a long time.”

Hutchison’s colleagues in Burness Paull’s Aberdeen office have also seen a lot of work around redundancy and restructuring. “That’s definitely been the theme this year,” she says.

“The other area we continue to be asked advice on is inappropriate use of social media by employees. That is employees posting comments about their employer on Facebook and the employer taking disciplinary action against them.

“That is something that we are being asked for views on more and more regularly.”

While both Kemp and Hutchison highlight different areas of activity in the sector, both agree that the biggest general issue is still fees.

On 1 September, the Scottish government announced plans to abolish fees for employment tribunals once they become clear on how the transfer of powers and responsibilities would work.

Employment tribunal fees have applied across the UK since 2013 with the claimant paying £250 to lodge a claim and a £950 hearing fee.

Kemp says the issue “is continuing to attract attention politically and, to a lesser extent, legally”.

“There’s going to be some kind of tension in the world of employment law from the political angle and the legal angle,” he adds.

John Sturrock, founder and chief executive of Core Solutions, is recognised as a pioneer in mediation. He says the changes regarding tribunal fees may well result in a greater uptake of mediators’ services. He also highlights oil and gas as an area ripe for mediation work.

“I think people in oil and gas have previously demonstrated that they can often sort out their problems pretty well,” says Sturrock.

“However, we have certainly had indications from one or two sources that there may be a greater need for mediation now, not least as collaboration is a key theme in the industry.”

Sturrock highlights the continuing use of external mediators within organisations, whether public or private sector, to deal with difficulties that arise between employees and employers.

“In Scotland we need to keep thinking about how we can make better use of the mediation process as another means of resolving disputes.”

Looking at the year ahead, the issue of tribunal fees will remain a hot topic among lawyers, while Hutchison predicts equal pay reporting will be the next big thing.

A consultation ended in September on regulations to be introduced next year which require companies with more than 250 employees to carry out an equal pay review and publish their gender pay gap.

“The government has to introduce equal pay reporting by March next year,” says Hutchison. “At the moment we don’t have any details about how that’s going to be implemented. There could be some legal risks initially.

“We have already seen the equal pay claims in the public sector. Similar claims are likely to arise in the private sector following the publication of pay information.”

• The Scotsman’s annual review of the legal world looks at some of the most active areas of legal practice in Scotland. Informed by comprehensive data published by Chambers and Partners and Legal 500, the articles give exclusive insight into the work of the more than 11,000 practicing solicitors and 463 practicing advocates.

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