The Employment Appeal Tribunal (EAT) is expected to hand down its long awaited judgment in the holiday pay and overtime cases tomorrow. We will, of course, report on the judgment as soon as it is published. However, the media furore has already started with reports that businesses are facing a potential bill running to billions of pounds. It has also been reported that some firms are looking to run PPI-type compensation campaigns, asking employees by text and email whether they have been underpaid holiday.
Many employers have adopted a "wait and see" approach to this issue, but with the EAT's judgment expected tomorrow, can employers really afford to wait any longer before taking action?
Is your business at risk of a significant underpayment claim? If so, what steps should your business be taking to mitigate that risk? We are advising a number of employers on the potential implications of this case, as well as other holiday pay cases, and would be happy to discuss the issues and possible solutions in more detail with you.
Sports Direct settles zero hours worker claims
Also in the media last week were reports that Sports Direct has settled its long running employment tribunal claim concerning its zero hour workforce. Although Sports Direct did not admit any liability, it is clear a number of concessions were made, most significantly in relation to paid holidays and sick leave for the workers.
Although the announcement will not carry any legal precedent, Sports Direct is the UK's biggest sporting retailer and employs nearly 20,000 staff on contracts with no fixed hours each week. Its agreement that it will make it clear to such workers that "casual" roles will not guarantee any work and also fully explain to the workers their paid holiday and sick leave entitlements, is potentially a significant step towards protecting workers on contracts with no guaranteed hours. This will certainly be the case if other major companies such as McDonald's, Wetherspoons and Domino's Pizza, who have also come under fire over their use of zero hour contracts, follow suit.
Woolworths - Collective Consultation
And finally, the Court of Justice of the European Union (ECJ) has announced that it will hear the Woolworths and Ethel Austin case on Thursday 20 November 2014, which is a referral from the Court of Appeal following the UK government's appeal of the EAT's decision in the case.
The EAT's decision brought about a significant change to the current law on collective redundancy consultation, ruling that the requirement in the UK legislation for the 20 redundancies to take place "at one establishment" for the purposes of triggering the employer's information and consultation obligations, was incompatible with the EU Directive, and must be disregarded.
An ECJ judgment on the meaning of establishment is welcome, not only for helping to conclude the six year legal wrangle in this case but more significantly for clearing up the long time uncertainty in this area of collective consultation in the UK.
For more information regarding any of the above, please do not hesitate to contact any member of the team.