Employment Bulletin April 2016

Employees entitled to have commission included in holiday pay

The Employment Appeal Tribunal has confirmed that employees are entitled to have commission earnings added to their holiday pay.

The decision is the latest round in a long running case involving British Gas and one of its salesmen, Mr Joe Lock. Mr Lock earned a basic wage plus commission. However, when he took holidays, he was only paid at the basic rate, with no element of commission.

He challenged this in 2012. The Employment Tribunal referred the case to the Court of Justice of the European Union (CJEU). It ruled that his commission was "intrinsically linked" to his work and should be included in his holiday pay.

It returned the case back to the tribunal to determine how the ruling could be incorporated into British law under the Working Time Regulations (WTR).

Last year, the tribunal held that the European Court's ruling was compatible with the WTR and so commission should be included in holiday pay. The Employment Appeal Tribunal has now upheld that decision.

The rulings mean that companies will now have include commission in holiday pay. They may also face claims for back pay; although the Deduction from Wages (Limitation) Regulations mean that any claims will be limited to two years.

Employers should also note that the ruling on commission only relates to the four week holiday entitlement under European law; it doesn't include the extra 1.6 weeks available under UK law.

The situation is still uncertain, however, as British Gas has sought permission to take the case to the Court of Appeal. We shall keep clients informed of developments.

Supermarket held liable for employee's assault on customer

A supermarket has been held liable after one of its employees carried out an unprovoked assault on a customer.

The incident arose when a customer asked for help from a kiosk attendant at a petrol station run by the supermarket. The attendant responded with foul-mouthed abuse and ordered the customer to leave.

He then followed him on to the forecourt where he told him to keep away and subjected him to a violent and unprovoked assault. The customer took legal action against the supermarket, claiming that it was vicariously liable for the attack.

The trial judge held that it was not liable because there was no sufficiently close connection between the assault and what the attendant was employed to do.

The Court of Appeal upheld the decision. The case then went to the Supreme Court, which has now ruled in favour of the customer.

It said it was the attendant's job to attend to customers and respond to their inquiries. His conduct in answering the customer's request in a foul-mouthed way and ordering him to leave was inexcusable but was within the field of activities assigned to him.

While on the forecourt, the attendant had repeated his order to leave. That was not something personal between him and the customer; he was ordering him to keep away from his employer's premises. He reinforced that order by violence. In doing so he was purporting to act in the furtherance of his employer's business.

While it was a gross abuse of his position, it was in connection with the business in which he was employed. Since the supermarket had entrusted him with the position of serving customers, it was right that it should be held responsible for his abuse of that position.

It was irrelevant that it looked as if the attendant was motivated by personal racism rather than a desire to benefit his employer's business.

Company did not discriminate against woman on maternity leave

The Employment Appeal Tribunal (EAT) has held that a company's childcare voucher scheme did not discriminate against a woman on maternity leave.

The case involved a company that operated a scheme that enabled employees to forego part of their salary in exchange for childcare vouchers. Entry to the scheme was conditional on employees accepting that membership during maternity leave would be suspended if they were in receipt of statutory maternity pay but no other pay.

An employee refused to accept that term, as she believed it to be discriminatory.

The tribunal held that those on maternity leave were entitled to non-pay benefits, and that the employer had acted unlawfully by requiring employees to forego such benefits as a condition of joining the scheme.

The EAT has now overturned that decision. It gave various reasons for its ruling, including the fact that the law allowed payment of a lower salary to those on maternity leave. It was not discrimination, nor contrary to the regulations.

Where part of the employee's wage was used by arrangement to pay for childcare, it was difficult to see why she should be entitled not only to the minimum maternity pay but also to the amount spent on childcare.

To require the continued provision of vouchers during maternity leave would produce a windfall benefit for an employee but would also impose a cost upon employers and discourage them from offering such a scheme. Parliament could not have intended that consequence.

Broker granted right to search a rival's computer system

A firm of insurance brokers have been granted the right to search a rival company's computers to prevent the misuse of confidential information.

The problem arose after a number of employees left the brokers and took confidential data with them. They then uploaded it on to their new employer's computer systems.

The brokers applied for a court injunction preventing the rival company from using the information to contact and poach their clients.

The company and former employees gave undertakings not to use the information to deal with restricted clients. However, the brokers felt the assurance was inadequate. They applied for an injunction allowing an independent expert to access the rival's computer system and delete the confidential information taken by the former employees.

The court ruled in their favour. It held that the brokers were entitled to further protection on the basis that the rival company was not entitled to have and use the information.

On the evidence presented, the former employees could not be trusted to police themselves. The court had to balance the risk of misuse against the scope and effect of any order for interim relief. A mandatory injunction provided the least risk of injustice.