A significant judgment delivered on July 26, 2017, by the UK Supreme Court increases the likelihood of employment claims being brought in the future and is of significance to all organizations employing staff in the United Kingdom.
The changes took effect on 6 April 2015 and apply to dismissals that occurred on, or will occur after, that date.
It is important for employers to note that
- If an employee was given notice prior to 6 April 2015, but the notice period expired on 6 April or will expire on a future date, the new limits above will apply to that dismissal.
- If an employee’s employment is terminated by means of a payment in lieu of notice, the effective date of termination (EDT) is the actual date the dismissal takes effect, plus the amount of statutory notice applicable to the employee, i.e., one week per year of employment, up to a maximum of 12 weeks. If the statutory notice would take the EDT to or beyond 6 April 2015, the new limits will apply.
An employer’s exposure in the event of an unfair dismissal claim will also rise and should therefore be factored into decision-making regarding litigation or settlement strategies.
In the latest in a long-running series of cases on holiday pay, the Employment Tribunal has handed down its first judgment in Lock v British Gas Trading Limited.
This judgment confirms the principle that workers paid commission should receive holiday pay at a rate reflecting normal income, which can include commission, rather than basic salary only.