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Article: Employment
and the Law - Recent Developments by Louise Fernandes-Owen
Louise Fernandes-Owen of Field Fisher Waterhouse LLP examines the latest key employment law developments.
New national minimum wage rates
The Government has accepted the recommendations from the Low Pay Commission (LPC) on the new rates for the National Minimum Wage.
The following new rates will come into force on 1 October 2010:
• £5.93 per hour for workers aged 21 and over;
• £4.92 per hour for 18-20 year olds; and
• £3.64 per hour for 16-17 year olds.
The Government has also accepted the LPC's recommendation to introduce an apprentice minimum wage of £2.50 per hour. This rate will apply to those apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship.
Additional paternity leave regulations
The House of Lords has approved the draft regulations relating to the new right to additional paternity leave.
The regulations are intended to come into force on 6 April 2010 and have effect for parents of children where the expected week of birth begins on or after 3 April 2011. Fathers will be entitled to take additional paternity leave provided the mother has returned to work (therefore giving parents the option of dividing a period of paid leave entitlement between them).
The regulations set out the framework for the new right and include the following provisions:
• the minimum period of additional paternity leave is 2 weeks and the maximum is 26 weeks;
• the leave must be taken in multiples of complete weeks and must be taken as one continuous period; and
• some of the leave may be paid if taken during the mother's 39 week maternity pay period. This would be paid at the same rate as Statutory Maternity Pay (this is currently £123.06 and will rise to
£124.88 in April 2010).
Default retirement age
Alistair Darling has confirmed that the Government is consulting on the reform of the default retirement age of 65. It is considering various options, including scrapping the default retirement age of 65, raising it or reforming the legislative framework to strengthen the position of the employee. No changes will be made before April 2011.
When holiday and sick leave coincide
An Employment Tribunal has confirmed that an employee who is unable to take his pre-booked holiday due to sickness should be allowed to carry over his leave entitlement to the following leave year.
Under regulation 13(9) of the Working Time Regulations 1998 (WTR), leave can only be taken in the leave year in respect of which it is due. However, the European Court of Justice confirmed last year, in Pereda v Madrid Movilidad SA, that under the Working Time Directive, workers who are sick during a period of annual leave are entitled to take that leave at a later date which, if it cannot be rescheduled in the current leave year, may be in a subsequent leave year. This ruling has now been applied by an Employment Tribunal in the UK.
In Shah v First West Yorkshire Limited, Mr Shah's sickness absence overlapped with his booked holiday. During his absence, Mr Shah received contractual sick pay and was also paid holiday pay for the leave he had booked. His employer confirmed that Mr Shah could not reclaim his holiday as he returned to work in the new holiday year, and therefore the holiday had been "lost". Mr Shah brought a claim for his loss of holiday.
The Employment Tribunal considered that, following Pereda and in order to comply with the Directive, national law must permit an employee who falls sick during a period of annual leave to take that leave later and, if time does not permit it to be taken within the current leave year, within the following leave year. The question arose whether it was permissible to construe regulation 13(9) of the WTR so as to give effect to the Directive and Pereda.
The Employment Tribunal stated that the primary health and safety purpose of regulation 13(9) is to give workers paid periods of leisure regularly throughout the year and prevent them from storing up holidays or taking lengthy periods of extended leave. It considered that adding words to the end of regulation 13(9), to cover the 'limited and special situation' dealt with in Pereda, would be consistent with the underlying thrust of the legislation.
The Employment Tribunal therefore upheld Mr Shah's claim and made a declaration under the WTR that the employer had refused to allow Mr Shah to exercise his rights under the WTR by refusing to allow him to take his accrued holiday in the following leave year when he was prevented by illness from taking it in the current leave year. Whilst the Employment Tribunal's decision is not binding on other tribunals, it provides long-awaited guidance on the interpretation of the
WTR.
Louise Fernandes-Owen is the Professional Support Lawyer in the Employment and Pensions Group at Field Fisher Waterhouse LLP and can be contacted at
louise.fernandes-owen@ffw.com
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