Be Aware – June 2023

Legal & HR

This month, the IGA Legal Team provides members with advice on how to calculate bank holiday entitlements, comments on new Government proposals to simplify employment law, offers advice on an employer’s responsibilities towards employees working on their own, and reminds employers of the importance of using the correct templates when employing apprentices.

Bank Holiday entitlement

There are normally eight bank holidays a year in England and Wales, nine in Scotland, and 10 in Northern Ireland. However, in recent years with extra bank holidays being granted for the Platinum Jubilee and Queen Elizabeth’s funeral it can be difficult to ascertain employees’ entitlements and what an employer can require.

Holiday Entitlement

The Working Time Regulations 1998 entitles employees to a 5.6-week minimum Holiday entitlement, this equates to 28 days for a full-time employee and should be pro-rata’d for any part-time employees.

However, the Working Time Regulations 1998 do not differentiate between bank holidays and other days and do not prevent employers from including them in the 5.6-week minimum annual leave entitlement.

Bank holidays will be either:-

Part of your overall holiday entitlement, or
In addition to your contractual annual leave

Which applies will depend on your contract either expressly in writing or through custom and practice. If in doubt you should review any written contract to see whether holiday are ’28 days inclusive of bank holidays’ or words to similar effect.

If there is no specific mention of bank holidays then it can be assumed that bank holidays/public holidays are part of the overall holiday entitlement unless this is contrary to custom and practice.

Are employees entitled to time off for bank holiday or to extra pay if they are required to work?

There is no automatic right to time off for bank holidays, neither is there a statutory right to any extra pay if employees are required to work a bank holiday.

As an employer you can require employees to take their holidays at certain times, provided they are given sufficient notice. Alternatively, you can also refuse any holiday requests provided an employee is offered a suitable alternative period. Employees are only entitled to take bank holidays automatically and/or extra pay for working if these rights are incorporated into their contract either expressly in writing or through custom and practice.

What about my Part time workers?

You are required to ensure that that part-time employees are not treated less favourably than full-time employees. Where your contracted holiday is inclusive of bank holidays then whether or not the part-time employees work bank holidays they will be treated fairly as all employees will receive the same holidays.

Where your holidays are exclusive of bank holidays then you should give your part-time workers a pro rata entitlement to bank holidays according to the number of hours that the part-time employee works, irrespective of whether or not they usually work on the days on which those public holidays fall to avoid the risk of less favourable treatment compared to full-time workers in breach of the Part-time Workers Regulations 2000.

In Conclusion

Your contract should be clear as to whether an employees holiday includes bank holidays or whether it is given in addition to bank holidays. If the contract states it is 28 days inclusive of bank holidays, then no matter how many extra bank holidays are given then the holiday entitlement will never get beyond 28 days. Where the contract is 20 days plus bank holidays, then any additional bank holidays will entitle employees to an extra paid day’s holiday, but only in that year.

If your contract is not clear, then you will have to remain consistent with any previous custom and practice.

Government Proposals to Simplify Employment Law

In ‘Smarter Regulation to Grow the Economy’ (May 2023) the Government has announced a number of proposals to introduce legislation with the intention to grow the economy, as well as save red tape for businesses by simplifying regulations in a post-Brexit era.

It contains some proposed changes in employment law, including measures to simplify the Working Time Regulations, altering TUPE by removing employee representatives for small businesses, and limiting non-compete clauses to 3 months.

Working Time Regulations

Firstly, the Government wish to remove retained EU case law that imposed requirements on businesses for working hour records to be kept for almost all members of the workforce. It says this is being done to cut red tape and save £1bn for businesses, while protecting the rights of workers. Furthermore, there is a proposal to introduce rolled-up holiday (which was not previously legal under EU regulations) so that workers can receive their holiday pay with every payslip. They are also proposing to merge the two separate leave entitlements (‘normal’ and ‘additional’) creating one pot of statutory annual leave.

TUPE

Under the new proposals, businesses with under 50 employees or under 10 transferring employees would no longer need to elect an employee representative, allowing businesses to consult directly with the affected employees. This is again being done with the aim to remove red tape for businesses, whilst improving engagement with workers.

Non-Compete Clauses

This proposal would look to limit the amount of time a non-compete clause can be imposed to a maximum of 3 months after an employee has moved on. The Government hopes this will provide 5 million employees with more freedom and flexibility to apply their skills somewhere else, in an effort to boost the economy.

Comment

In regard to the changes to the Working Time Regulations, some businesses will welcome them even though they are fairly minimal. Rolled-up holiday has supposedly been unlawful for some time but in practice, if both employer and employee are happy with rolling up holiday pay, it is unusual for it to be taken to Court.

Additionally, the changes in TUPE will be beneficial to small businesses as it will remove the unnecessary hassle and complexity of setting up elections. However, the proposals to alter TUPE are extremely minimal and do not touch other onerous regulations for informing or consulting prior to a TUPE transfer.

The change to non-compete clauses will be welcomed by many employees, however in reality this does not change a lot for employers as (a) non-compete clauses are fairly rare and (b) this only applies to non-compete clauses and therefore excludes, for example, non-solicitation and non-poaching.

Inevitably this may also lead to more employers introducing or lengthening garden leave, to extend the time a leaving employee is away from the business (and able to use their connections or acquired confidential information to damage the employer).

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

Lone Working

“I run a small body repair MOT workshop. I sometimes have to leave my technician working on his own when I am out of the business, is that okay? Is there any law in this area?”

Employers who have employees who are likely to be working on their own need to carry out a risk assessment. The Health and Safety at Work Act 1974 ensures a duty of care on employers to ensure the health, safety and welfare of their employees. The Management of Health and Safety at Work Regulations also require employers to carry out a risk assessment.

In the above situation a bodyshop or MOT testing area is likely to be a relatively hazardous environment. The employer is required to consider the risks posed to a lone worker in such an environment. Where a risk assessment shows it is not possible for the work to be done safely by a lone worker, arrangements for providing help or backup should be put in place. A risk assessment might include that it is not safe for one person to work alone, examples include working in confined space or work involving electrics or other dangers where two people might be required to be present.

Precautions should be planned for foreseeable emergencies e.g. fire, equipment failure, illness and accidents etc.

The following questions should be asked by the employer:

Does the workplace present a special risk to the lone worker?
Is there a safe way in and a way out for one person? Can any temporary access equipment which is necessary, such as portable ladders or trestles, be safely handled by one person?
Can all the plant, substances and goods involved in the work be safely handled by one person? Consider whether the work involves lifting objects too large for one person or whether more than one person is needed to operate essential controls for the safe running of equipment.
Is there a risk of violence?
Are women especially at risk if they work alone?
Are young workers especially at risk if they work alone?
Is the person medically fit and suitable to work alone?
What happens if the person becomes ill, has an accident or there is an emergency?

Dismissing an Apprentice

“We have a first-year apprentice employed on our standard contract of employment (rather than an ASCLA compliant apprenticeship agreement for England or Wales). We are thinking of dismissing the apprenticeship as he is lazy. What are the risks to our business if we dismiss here? “

If there is no written apprenticeship agreement, or where there is a written agreement, but it is not an ASCLA compliant apprenticeship agreement (e.g. an approved English apprenticeship agreement), then the individual will have the status of “apprentice” (i.e. working under a contract of apprenticeship) rather than “employee”.

A contract of apprenticeship that is not under an ASCLA compliant agreement, is not terminable for misconduct or poor performance in the same way as an ordinary contract of employment. Similarly, a contract of apprenticeship that is not under an ASCLA compliant agreement cannot be terminated on the grounds of redundancy unless your business closes entirely or undergoes such a fundamental in character that the apprenticeship is impossible.

Someone with the status of “apprentice” that is not under an ASCLA compliant agreement can only be lawfully dismissed if their conduct is so bad that it is virtually impossible for them to complete their apprenticeship.

In this situation, if the employer decided to dismiss the apprentice, then it would be deemed to be a wrongful termination in breach of contract. The apprentice may therefore have a claim for enhanced damages (uncapped) by reason of the loss of their prospects as a tradesman on completion of their apprenticeship (Dunk v George Waller & Son Ltd [1970 2 All ER 630 and Wallace v CA Roofing Services Ltd [1996] IRLR 435). In the case of Dunk, the Court held that an employer was not entitled to end the apprenticeship when the apprentice failed certain examinations and held that the employer had to pay damages representing not just lost wages but also the prospective loss of skills and enhanced earning capacity.

The case of Wallace concerned an apprentice sheet metal worker who was dismissed for reason of redundancy after 19 months and claimed damages for breach of contract, arguing that the contract was one of apprenticeship and therefore not subject to a redundancy dismissal. This was held to be the case and the matter was remitted for damages to be assessed, presumably on the basis that the contract should have been one for four years. An apprentice in this type of case could therefore be awarded significant damages to reflect both the loss of income for the remainder of their fixed-term contract and the loss of training opportunities and the consequent harm done to their chances of eventually obtaining a good job.

Conclusion

The examples of the case-law highlighted above demonstrates that is vital that RMI members use the RMI template apprenticeship agreements for apprentices in England and Wales otherwise they face the risk of significant compensation claims if the apprentice is deemed to be wrongfully dismissed. The situation is different in Scotland where the ASCLA apprenticeship framework does not apply such that they have the status of “apprentice”.

General Note

Motor Industry Legal Services

Motor Industry Legal Services (MILS) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.