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Warning to employers following major court decisions

Employers are being warned to make sure their practices and procedures are up-to-date following a trio of major court rulings affecting how staff are paid.

One case saw a British Gas worker win a case claiming that the commission he earned from sales should be included when calculating holiday pay.

This decision, upheld by the Court of Appeal, has seen some major employers settle all potential claims from staff to remove any further liability for the future, but small firms are being warned to adopt the new approach when calculating holiday pay moving forwards.

The second case saw a group of workers claim unlawful deduction of wages against Dudley Metropolitan Borough Council, arguing that their holiday pay should be calculated against voluntary overtime, standby allowances, call-out payments and mileage.

The court decided that failure to include these factors in holiday pay calculations could deter staff from taking annual leave; and where voluntary overtime is regularly worked it should be included in the calculation.

The decision is not legally binding, but Julie Duane of Napthens solicitors’ Employment & HR team, warned employers must have it on their radar.

Finally, a case involving security giants G4S has seen an employee with a disability successfully claim that ‘reasonable adjustments’ can be seen to extend to an employer offering an employee ‘pay protection’ when undertaking a redeployment opportunity in the business.

Pay protection safeguards the pay and conditions of employees whose role is affected by changes to the employer’s organisation.

In the case in question, the staff member was suffering from a disability which meant he was unable to fulfil the duties of his previous post. He was moved to another role and ultimately dismissed.

Julie Duane of Napthens warned that employers in this kind of situation need a strong rationale for a move and reduced salary.

She added: “It is unusual to have three court cases which could directly affect important issues around payment and staff leave.

“Employers should keep a careful eye on the latest legal changes to ensure they follow the letter of the law.”

Julie Duane, Employment Solicitor