Another bank holiday – Employers options

Another bank holiday – Employers options

We have another bank holiday on 19 September 2022 and employers will be wondering where they stand in terms of allowing employees/workers to take the day off. It is important to note that they do not automatically have the right to take the day off work. Employers need to look at how they approach the additional bank holiday.

Almost all workers are legally entitled to 5.6 weeks’ paid holiday a year (known as statutory leave entitlement or annual leave).

An employer can include bank holidays as part of statutory annual leave. However, bank or public holidays do not have to be given as paid leave.

When deciding whether to allow the worker time off for the bank holiday on 19 September 2022, the first thing employers will need to do is check the contract of employment.

If the contract of employment states that employees are entitled to 8 bank holidays, then they do not have allow them the day off as a bank holiday on 19 September 2022.

There is no statutory right to extra pay, for example time and a half or double time, when an employee works on a bank holiday. Any right to extra pay depends on the terms of the employee’s contract of employment.

Organisations may decide to close their offices on 19 September 2022. If they do, then they may require employees to take the day off using their annual entitlement. They must give them at least 2 days’ notice if they want their employees to use their annual leave entitlement to take the day off. Give more notice if possible.

Alternatively, some employers may wish to consider allowing employees to take unpaid leave, if they decide not to close their offices on 19 September 2022 but their employees do not want to work on 19 September 2022.

Of course, even if the employer is not contractually obliged to grant the extra day as leave, it may choose to do so as a goodwill gesture to employees, especially given the historical significance of the event.

However, if the employment contract does not state the number of bank holidays i.e. “you will be entitled to bank holidays and 20 days” then employers are likely to have to allow the employee a paid day off on 19 September 2022.

For more information on dealing with annual entitlement/public holidays or drafting/reviewing your employment contracts contact us on 0207 903 6889 or email

Another bank holiday – Employers options
Another bank holiday – Employers options

Political Opinions and unfair dismissal

The right to bring claims against an employer for unfair dismissal usually requires an employee to have at least two years of continuous service. There are however some statutory exceptions to this rule as set out in The Employment Rights Act 1996. These exceptions are usually deemed as automatic unfair dismissal.   A person does not have to have two years of service to bring a claim if they are able to show for example that they were dismissed because of reasons connected to childbirth or pregnancy, health and safety or whistleblowing amongst other things.

A further exception is also included in regards to dismissals which relate to political opinions or affiliations. In such circumstances, an employee with less than 2 years’ service would therefore potentially be allowed to proceed with a normal unfair dismissal claim. This will not however make the dismissal automatically unfair.

Where dismissals relate to political opinions, employees with less than two years’ service may also usually rely on the rights conferred by equality legislation. The Equality Act 2010 provides that individuals may not be discriminated against on the grounds of their religion or belief, with this protected characteristic well established as including political and philosophical beliefs which meet the legal tests. Where an employee with less than two years’ service is therefore dismissed for their political beliefs they may usually pursue a discrimination claim.

The recent case of Scottish Federation of Housing Associations v Jones [2022] illustrates the approach the Tribunal will take when considering when and how to apply the “political opinions or affiliation” exception to the qualifying period for unfair dismissals.

In this case Ms. Jones was employed by the Scottish Federation of Housing Associations as its Head of Membership and Policy. Her contract contained a “political activity” clause which prevented her from taking a formal political role but which did not however prohibit her from belonging to a political party.

Around 6 months into her employment, Ms. Jones informed her employer that she wished to stand as a candidate for Scottish Labour at the next General Election. Her employer refused this request as it would have been deemed a formal political role. Ms. Jones subsequently withdrew her candidature. Following this Ms. Jones was dismissed from her employment. Her employer cited a number of reasons none of which included any reference to her political aspirations, beliefs or affiliations. Ms. Jones did not accept the reasons cited and instead sought to rely on the exception in
s.108 (4) ERA 1996 to allow her to pursue an unfair dismissal claim on the basis that she was dismissed for having sought permission to stand as a Parliamentary candidate; despite not having the requisite length of service. She also lodged a discrimination claim on the grounds of belief- the belief element being formulated as a philosophical belief  that “those with the relevant skills, ability and passion should participate in the democratic process”. In doing so claimed that she had been
dismissed by the employer for seeking to exercise that belief by wanting to stand as a Parliamentary candidate.

The matter was considered by an Employment Tribunal and eventually went to the EAT on appeal. The EAT took a very narrow approach to the interpretation of the exception In s.108(4) ERA.  The original Tribunal found that Ms. Jones, despite not having two years’ service could rely on the exception in s.108(4) in order to pursue an unfair dismissal claim, because she alleged, she was dismissed for having sought to stand as a Parliamentary Candidate. The EAT however found that this interpretation was incorrect. It said that the wording of the statute was unequivocal; it only applied
to dismissals which related to an employee having held a particular belief or affiliated with a particular political party.

On the facts, the employer’s refusal to grant permission for Ms. Jones to take a formal role, given that there was already a political neutrality clause in her contract, did not amount to having dismissed her in her regard to either her political opinions or affiliations. She was therefore barred from proceeding with an unfair dismissal claim.

The EAT did allow her discrimination complaint to proceed however, finding that her philosophical belief was protected under the Equality legislation.

The case is a useful illustration of the Tribunal’s narrow application of the exception contained in s.108 (4) ERA. Employees who seek to rely on the exception must usually have clear evidence and reason then that the dismissal was related to their political opinions or beliefs. Related ancillary reasons will not be sufficient. Importantly too, for employers, the case is an important reminder of the protection that the Equality Act affords all employees, regardless of length of service.

For further advice on dismissing an employee fairly or defending an Employment Tribunal claim please contact us on 02079036889 or email

Can long covid be a disability and what does it mean for employers?

The National Institute for Health and Care Excellence (NICE) has defined ‘long Covid’ – or ‘Post-Covid 19 Syndrome’ – as ‘signs and symptoms that develop during or after an infection consistent with Covid-19, which continue for more than 12 weeks and are not explained by an alternative diagnosis. It usually presents with clusters of symptoms, often overlapping, which can fluctuate and change over time and can affect any system in the body’. But can long covid be a disability and what does it mean for employers?

Long Covid

The symptoms of long covid include a cough, breathlessness, fever, palpitations, fatigue, cognitive impairment and joint pain. Although the majority of people infected with Covid-19 recover within a 12-week timeframe, it is estimated that more than one million people in the UK are suffering with prolonged side effects. Employers will therefore be increasingly interested in how to manage this within the workplace.

Long Covid and the Equality Act

Section 6 of the Equality Act 2010 outlines that a person has a ‘disability’ if they have (i) a physical or mental impairment and (ii) which has a ‘substantial’ and ‘long-term’ adverse effect on the ability to carry out normal day-to-day activities.

In the absence of any Employment Tribunal ruling and the evolving nature of Covid-19, there is currently no definitive answer to whether ‘long Covid’ satisfies the above statutory definition.

Nonetheless, an employee suffering ‘long Covid’ symptoms would be likely to demonstrate a physical or mental impairment that impacts their ability to carry out ‘normal day-to-day activities’. For example, an employee suffering with breathlessness and cognitive impairment may struggle to complete day-to-day activities such as concentrating or to walking or talking as easily as they could before.

Satisfying the ‘substantial’ and ‘long term’ requirements will be a more difficult exercise for employees. Determining the ‘substantial’ effect of ‘long Covid’ will be based on the individual circumstances of the case and will depend on the severity of symptoms. Government guidance stipulates that an impairment is considered ‘long term’ if it is likely to last or has lasted 12 months. As it has been more than a year since the pandemic began, an employee could potentially provide evidence that ‘long Covid’ has affected them for this period of time. However, this remains a grey area, as medical experts remain unsure as to the average length of symptoms and their fluctuating nature.

Long covid and ACAS

ACAS has also issued sickness and absence advice for employers and employees dealing with ‘long Covid’. Most notably, when approaching the subject of whether it amounts to a disability, ACAS have stated that ‘it is a good idea for the employer to focus on reasonable adjustments they can make rather than trying to work out if an employee’s condition is a disability.’ The guidance therefore doesn’t answer the question directly but takes a pre-emptive and cautious approach. ACAS appears, indirectly, to consider ‘long Covid’ as a disability by implication with its focus on reasonable adjustments.

If you require further advice on managing long covid in the workplace, or implementing policies within the workplace, please contact one of our employment law experts today.

What is fire and rehire

What is fire and rehire

Dismissal and re-engagement, commonly known as ‘fire and rehire’, is a practice employers adopt when making changes to terms and conditions of employment. Employees who refuse to agree to proposed new terms are dismissed and re-engaged on different, often less generous, terms. The term hit the headlines back in March of this year when P&O Ferries made the decision to immediately dismiss around 800 of their UK-based crew members by pre-recorded zoom call. 

Firing and rehiring is not unlawful, but the tactic is controversial and might expose employers to statutory (including unfair dismissal) and contractual claims. Employers may also have collective consultation obligations if large numbers of employees are involved.

When is change allowed without employee agreement?

Employment contracts are no different from any other contract in the sense that normally neither party can unilaterally change the terms without the agreement of the other. Some contracts include clauses that purport to allow employers to implement changes, by giving say a month’s notice of the change. These can be effective for minor changes, but it would be risky to rely on them for more fundamental changes to terms, such as pay. There are two reasons for this: firstly, if they are implemented unreasonably the employer may be in fundamental breach of contract (enabling the employee to resign and claim unfair constructive dismissal) and secondly, they may be deemed to be void for uncertainty.

How can employers make changes lawfully?

The first thing for employers to do is to look at the existing contract and see what terms they are looking to change. It could be pay, hours, benefits, or any other contractual term. Once the desired changes have been identified, the next step is to consult with the affected employees. This will involve explaining the proposed changes and explaining why they are required. This may be to preserve jobs, or for operational reasons, or sometimes just for the company to increase its profits. The employees should be asked for their views on the proposed changes and whether they are willing to agree to them. They should also be advised of the possible consequences of refusing the changes, for example, the potential of some redundancies. The employees’ views should be considered and taken into account, and hopefully, an agreement reached.

If an agreement is not reached, then the employer can impose the new terms. This is not without risks – employees may resign and claim unfair constructive dismissal (subject to having 2 years’ service). Whether such a claim will succeed will depend on the facts of the case, including the reasons for the change and the level of consultation. The employee may alternatively seek some other form of legal remedy, for example where there is a reduction in pay, refusing to accept the reduction and bringing a claim for unauthorised deduction of wages. Another option potentially open to employees is some form of industrial action.

The other route open to employers is to dismiss all the employees by giving them their contractual notice and then offering them fresh employment on revised terms. This is something of a last resort for employers. In the right circumstances, it can be an effective way of getting new terms in place, but again it is not without risk. Dismissed employees would be able to bring claims of unfair dismissal (again, subject to having sufficient continuous service). As with the claims of unfair constructive dismissal outlined above, the question of whether the claims would succeed will depend on the particular circumstances, and again the level of consultation will be an important factor. Another factor will be how many employees accepted the changes without the need for dismissing and offering new terms. If a substantial majority did, it will make it harder for those who did not, to argue that their dismissals were unfair.

Whilst “fire and rehire” is potentially lawful, it can be a high-risk strategy that employers should not take on without understanding the risks and pitfalls involved. It is certainly an area where specialist legal advice will significantly reduce the risks.

We hope that you’ve found this post on what is fire and rehire useful. If you are an employer who is wanting to understand the legal implications of making contractual changes then we can help. Contract our employment law experts here.

How to correctly identify a redundancy pool

How to correctly identify a redundancy pool

Identifying and selecting the correct redundancy pool is one of the most challenging aspects of the redundancy procedure. Failing to consider a pool entirely or identifying the wrong pool may make the dismissal unfair and lead to an employment tribunal claim. Here, we look at how to correctly identify a redundancy pool.

What is a redundancy pool?

A redundancy pool is a group of employees who would be selected as being at risk of redundancy. There are no fixed rules about how the pool should be made up and there is no single right approach. However, employers are required to act reasonably and take care to avoid discrimination. If done correctly, redundancy pools help make sure employees are selected for redundancy in a fair way. Generally, a pool would be a group of employees who carry the same job role.

Factors to be considered

Organisations who have a redundancy procedure should ensure they comply with the procedure, usually, this is located in their staff handbook. If they do not, reference should be made to the ACAS guidance.

When determining a selection pool an organisation may make reference to several factors, including:

-Duties and responsibilities: Employees that undertake the same or similar roles may be included in the pool. The pool need not be limited to employees who undertake identical roles. For example, if an organisation is looking to make redundancies within its secretarial team, it may be unreasonable for it to exclude members of the administrative team who do similar/the same work as the secretarial team.

-Organisation structure: If employers are considering making redundancies within a particular team, they should look at the business as a whole and consider whether there are employees who undertake similar/the same work even if they work in a different part of the business or different shift unless there is a good reason to excuse them.

-Location: employers may consider employees who work at a different location but carry out the same or similar roles as the individuals who are at risk of redundancy when they are considering their redundancy pool.

-Interchangeable skills: If an employee has previously worked in other roles at the organisation, it is likely that their skills are interchangeable with other employees and so a wider pool may be required.

-Associated Employers: The Employment Rights Act 1996 states that the business of the employer together with the business or businesses of associated employers shall be treated as one for the purposes of determining whether or not a redundancy situation exists. Therefore, it may be appropriate to include employees working in associated companies who carry out the same or similar roles.

If the organisation recognises a union, it is expected that the choice of pool will be discussed with the union.

The size of the redundancy pool

Usually, employers like to keep the redundancy pool narrow, the wider the pool the more onerous the process shall be on the employer as there shall be more individuals to consult with. However, employees tend to prefer wider pools as this reduces their risk of being made redundant.

Employers who want to formulate a narrow pool which contains solely of those provisionally selective for redundancy should bear in mind the litigation risk associated with this as they are effectively by passing the pool stage.

How we can assist

Our team of expert employment solicitors can assist you in ensuring that you select the correct redundancy pool and therefore reducing the risk of an unfair dismissal employment tribunal claim. To speak to a member of our team, please call 02079036888 or email us at

What is the difference between a staff handbook and a contract of employment?

the difference between a staff handbook and a contract of employment

For all employers, a legally sound, comprehensive employment contract is essential – not just for legal compliance but also to ensure employer and employee alike understand what is required of them, right from the start of the relationship. Whereas a staff handbook is a written summary of the standards of behaviour expected of your employees. It is important to understand the distinction and which items go where given the documents’ nature. In this post, we look at the difference between a staff handbook and a contract of employment.

Employment Contracts

An employment contract is a key contract that binds you and the employee. Although not expressly required by law, it is important to have an employment agreement to govern the relationship between you and your employees. Some key terms of an employment agreement include the following and are crucial for the corresponding legal reasons.

Staff Handbook

A staff handbook is made up of policies, and it is useful to think of policies as a written summary of your directions to employees. A policy can cover a range of different topics and can be broadly classified into two categories: core policies and operational policies.

Core policies speak to your vicarious legal liability, i.e. whether you are responsible for an employee’s acts or omissions such as a health and safety policy or an anti-discrimination policy; and
-An operational policy is anything other than core policies and speaks purely to operational matters such as how to submit leave, uniforms, punctuality, etc. If you have a direction you would like to clearly communicate to the company as a whole, a policy is a practical way of doing so.

What are the key differences between a staff handbook and a contract of employment?

  1. The type of document

An employment contract is a contract and therefore creates binding obligations on the parties. If a party breaches its obligations, the other party can ultimately go to court to seek to enforce the agreement. An employer may also take disciplinary action or dismiss the employee if the employee breaches the contract. A staff handbook, on the other hand, is a collection of policies. Policies are not a contract and cannot be enforced in court. If an employee breaches a policy, you may take disciplinary action such as issuing a warning or termination.

  1. What the document covers

An employment contract includes the key terms which remain the same throughout the term of the employment relationship (unless varied in writing by agreement).

A staff handbook should include core policies such as a:

Disciplinary and grievance policies;

-anti-discrimination, bullying, and harassment policy; and

-IT policy.

It can otherwise include a range of operational matters and can therefore be very detailed, including how to complete timesheets or expenses.

  1. How the document can be amended

An employment contract cannot be unilaterally changed. Both parties must agree to the change, generally using a signed letter of variation or signing a new agreement.

You can change a staff handbook without seeking the employee’s approval.

For example, you can change the way expenses are processed and document it in the policies without employees agreeing to it. It is useful for employees to be notified of any changes, and you may also wish to seek their written acknowledgment.

In summary

The employment contract should cover critical items and items that you may want to contractually enforce during and after the employment. The staff handbook covers details of some critical items for which you may be vicariously liable and operational matters.

You must seek the employee’s agreement to vary the employment agreement, but a handbook can be unilaterally changed given your directions to employees may change over time. If you would like assistance with drafting your employment agreement or handbook, contact our employment law experts here.

The key things an Employer should consider before deciding to settle or defend an Employment Tribunal claim

Recently, the BBC spent £500,000 defending an unfair dismissal claim against its former chief technology officer, after being offered to settle the case for £50,000.  The sum of almost £500,00 did not include damages paid to the claimant, which were reported to be nearly £80,000. Here, we look at the key things an Employer should consider before deciding to settle or defend an Employment Tribunal claim.

When facing a tribunal claim, an employer needs to understand the different influences on the situation they are facing. It is important to make sure that you make the right decision in each situation as there are no guarantees and there are costs involved, irrespective of the outcome.

There are counter considerations if you settle cases on a cost-saving basis, like employees who settle because it will save them money, but there also needs to be a balancing act between the benefits of defending the case, and the benefits of resolving the claim quickly.

Key considerations for employers before deciding to settle or defend an Employment Tribunal claim

Your Chances of Success
If you have all the documentation and information available about the claim, you should be able to assess the chances of fighting it successfully. If your chances are below 50%, it may be a good idea to consider settling.

Costs and Remedy
How much will it cost you to defend the claim and will defending the claim cost you more than just settling it? As well as your court costs, depending on the type of case, if you lose, you could be ordered to pay the claimant compensation and witness expenses they’ve paid.

Workplace Culture
The settlement could have an indirect impact on your business if it affects employee relations or causes an internal expectation. Employees could see a settlement as rewarding an ex-employee.  

Indirect Message
If the claim is against the management team, a settlement of a claim may send a message that managers are not supported.

Whether the publicity associated with going to tribunal could affect your business. However, depending on the claim, you may want to defend the claim to avoid setting a precedent.

It is worth taking out Employer’s Dispute Insurance, which is not the same as Employers Liability Insurance! Most insurance covers will cover your legal costs associated with defending a claim. If you already have Employer’s Dispute Insurance in place, then speak to your insurers. We are pleased to be working with an external insurance company that provides a very comprehensive cover. For more details please contact us here.

Every case is different but to defend a claim as an employer, take all the factors above into consideration and keep the chances of success and settlement under review throughout the cycle of the claim.

We hope that you have found this post on The key things an Employer should consider before deciding to settle or defend an employment tribunal claim useful. If you’re an employer looking for advice when it comes to settlement agreements or an employment tribunal claim, please contact one of our employment lawyers today.

Key changes to right-to-work checks coming into force on 6 April 2022

There are a number of key changes to right-to-work checks coming into force on 6 April 2022, which we will seek to explain and explore in this blog post.

What are right-to-work checks?

Freedom of movement between the UK and the EU has now ended and the UK has introduced a new immigration system. As an employer, you must check that job applicants have the legal right to work in the UK before they start their employment. The EU Settlement Scheme ended on 30 June 2021 (although applicants may still apply after this date where they have a ‘reasonable excuse’ for making the application late).

A right-to-work check is used by the Home Office to verify that workers have the right to work in the UK. Employers must check that an applicant is allowed to work in the UK before they employ them, or they could face a penalty.

Employers should carry out a compliant check before the employment commences, or could face a penalty. There is no requirement to carry out retrospective checks for staff already employed prior to 1 July 2021.

What is changing on 6th April?

From Wednesday 6th April 2022, the following changes will occur:

Migrants who have a standard work or residence permit can only be checked online, not manually. This applies to people with a biometric residence card, biometric residence permit or frontier worker permit.
Adjusted right-to-work checks will no longer count. These were always intended as a temporary concession to the pandemic but were extended several times as the coronavirus situation dragged on.
In place of the adjusted checks, a new system of digital checks is being introduced as an alternative to manual checks. This still involves people submitting “images of their personal documents” rather than bringing in the original, but using “Identity Document Validation Technology” instead of a scan or copy.

The new digital checks are aimed at British and Irish citizens. Online checks don’t work for non-migrants — i.e. the majority of workers — because they won’t show up in Home Office immigration records. If the adjusted checks had been simply abolished without being replaced, employers would have been back to checking most of their new employees manually. This new digital validation system maintains a remote alternative.

The Recruitment and Employment Confederation, which appears to have been involved in or consulted on digital checks, says the Home Office intends to charge for them: “This could vary from £1.45 to £70 per check”. It doesn’t seem that digital checks will be compulsory, so employers would be able to opt for manual checks if they begrudge the cost. This and other details should be addressed in “changes to legislation” — presumably to further amend the Immigration (Restrictions on Order 2007 — before the system is rolled out.

Broadly speaking, from 6 April 2022, right to-work-checks on most migrants will be online (and free) and checks on British or Irish nationals will be manual (and free) or digital (and maybe charged for).

For more information on the changes, view the Home Office guidance papers here.

For more details on the upcoming right to work,or any other immigration law matters, please contact one of our Immigration Law specialists here

What are the legal implications of P&O Ferries sacking 800 staff?

Have P&O ferries breached employment law?

Last week, P&O Ferries hit the headlines when they dismissed 800 employees with no prior warning.

As staff staged sit-ins on the company’s boats, with the backing of their trade unions, experts cast doubts over the legality of P&O’s plot to replace them with cheaper agency workers.  The affair could potentially cost P&O “hundreds of thousands” in unfair dismissal payouts and penalties for legal breaches, they said.

What laws have P&O potentially broken?

Employers are legally required to consult workers during a statutory notice period before making them redundant. P&O did not do this, so trade unions believe that its actions are likely to be unlawful. Additionally, employers wishing to make more than 100 redundancies must notify the business secretary at least 45 days in advance of those dismissals. A No10 spokesperson stated they were given no prior notice of this.

Failure to notify the secretary of state would be a breach of the Trade Union & Labour Relations (Consolidation) Act 1992, the TUC said.

Unions representing P&O workers have been consulting lawyers with a view to taking legal action.

Redundancy notices are being issued, with the P&O apparently having recognised the unlawfulness of its actions with comments that enhanced compensation will be paid.

Does this class as fire and rehire?

Fire and rehire is a hugely controversial method used by some companies, usually – but not always – when in dire financial straits. It involves sacking staff and then telling them they can apply for their old jobs on less favourable terms.

But what P&O is trying to do looks slightly different. Rather than rehiring staff to their old jobs, it is replacing them with agency workers and saying that sacked staff could, if they wanted, join those agencies, effectively seeking to avoid having to renegotiate terms with staff and their representatives.

Davenport Solicitors will be keeping a close eye on this case and will keep you updated on its development.

Should you wish to discuss employee dismissal, or any other employment law-related matters, with our experts, please do not hesitate to contact us here.

Calculating holiday pay correctly

How to caluculate holiday pay

Employees and workers begin to accrue holiday leave and pay as soon as they commence work. However, the terms on which an individual is engaged by an organisation, will affect how much leave, and therefore pay, they would be entitled to. In this post, we explore the topic of calculating holiday pay correctly.

Statutory Entitlement

The statutory entitlement for full-time employees is to 5.6 weeks (28 days) of holiday leave per year. Organisations may contractually offer more but cannot offer less. Should an employee join or leave a company part way through the annual leave year, their entitlement will be apportioned. For
For example, if they work 6 months of the annual leave year, they will be entitled to 50% of their leave entitlement.

However, the position calculations are different where the employee works on a part-time basis or zero-hour basis.

Part-time worker

Part-time workers holiday is apportioned in a similar way to that of a full-time employee whose employment starts or ends partway through an annual leave year. Should the part-time worker work 50% of the hours a full-time worker works, they would be entitled to 50% of the full-time annual leave entitlement.

Flexible workers

In many industries, it is inappropriate for organisations to employ individuals on a full-time, permanent contract basis. The needs of the business require more flexibility and employees are often engaged on a part-time, adaptable basis. However, this can present issues when calculating what holiday leave a worker may be entitled to compared to a full-time employee.

For example, schools may employ teachers on a zero-hour contract and not require them to work on a regular or weekly basis. This was the case in The Harpur Trust v Brazel, where a zero-hour contract teacher had been contractually entitled to 5.6 weeks’ annual leave, apportioned to reflect
the hours she worked. The school calculated her holiday pay by dividing 5.6 (the full-time entitlement) by 46.4 (the total number of weeks in a year less the 5.6 weeks) to be 12.07% of the hours worked each term. However, the employment appeal tribunal held that the method to calculated Ms Brazel’s holiday pay entitlement was to calculate the average of her normal rate of
pay over the 12 term time weeks prior to the holiday being taken using the method as stated in the Working Time Regulations.

Classification of individuals

When considering the holiday pay an individual is entitled to, it is important that businesses ensure they have classified an individual’s employment status correctly. Individuals may be engaged by a business as either an employee, worker, or a self-employed contractor. While employees and
workers are entitled to holiday pay, contractors are not. Should a business not categorise correctly, they may face an employment tribunal claim for failure to pay holiday pay.

When classifying individuals, businesses should consider how the relationship shall work on a practical day-to-day basis, as the employment tribunal shall look beyond the label given to the relationship. Factors that may indicate employee/worker status include: if the individual is required
to wear a uniform, attend work at specific times, or request holiday leave. On the other hand, if the individual raises an invoice or chooses their own working hours, this may indicate they are a self-employed contractor. The more control exercised by the business over the individual, the more likely
they are to be considered an employee/worker.

Pimlico Plumbers have been involved in an employment tribunal case for several years, brought by Mr. Smith who asserted his employment law rights as a worker, despite being regarded as self-employed by Pimlico. An employee’s/worker’s contract may state if an employee/worker does not
use their paid statutory leave entitlement, they will “lose it” and not be able to carry it over to the next annual leave year. However, where there is no such wording, employees/workers can carry up to four weeks over. As Pimlico, regarded Mr. Smith as a self-employed contractor, they did not pay
him for the leave he took, nor allow him to carry any unused leave over. By wrongly categorising Mr. Smith as self-employed, Mr. Smith’s right to paid annual leave, and to carry over leave, accumulated so that when his contract was terminated he was entitled to payment for all accrued by unpaid leave at the time of his termination.

This decision means that where individuals are incorrectly categorised as self-employed, they may be entitled to four weeks’ pay for each year of their engagement, should they be held to be employees.

How we can help

Organisations should review their engagement documents to ensure that it accurately represents the relationship between the parties. Through doing this, they will be able to identify risk exposure and consider mitigating factors, for example, the amount of leave that can be carried over is limited
to 4 weeks leave per year and you may be able to introduce a policy to reduce this.

Our team of expert employment lawyers can work with you to ensure that you are categorising individuals correctly and advise you on their holiday entitlements. Should you have concerns about the employment status of individuals you engage and would like to speak to a member of our
employment team, please contact us via email at or telephone on 02079036888.