Legal news roundup - August 2018

By: Fanny Marshall

Date: 9 August 2018

Legal news roundup - August 2018This month, while the rest of us have been on holiday, the 'powers that be' have been busy publishing and updating lots of useful guidance for businesses, including Acas guidance on overtime, a compulsory GOV.UK checklist for tenants and a useful toolkit for employers on drugs, alcohol and tobacco in the workplace.

Meanwhile, in the courts, there have been important rulings on calculating holiday pay, gross misconduct and whether or not employers should include the hours a sleep-in employee spends sleeping when calculating the national living and minimum wage. Read on…

Shock Court of Appeal ruling means employees with no specific duties are not working while asleep, when calculating whether minimum wage is being paid

The national minimum and living wage rules say that workers are working, for the purposes of calculating whether they are receiving the national or living wage, when they are required to be available at or near a place of work other than their home for the purpose of doing work.

However, there is an exception where a worker is, by arrangement, allocated suitable facilities for sleeping at or near their place of work. In that case, only the hours the worker is awake is counted for those purposes.

Historically, the courts and tribunals have ruled on the basis that in some circumstances, sleep-in workers can be working whilst asleep, even if provided with sleeping facilities.

However, in a recent case the Court of Appeal overruled previous decisions. It drew a distinction between being available for work and actually working, saying that where an employee has no specific duties to carry out, but is merely required to 'be there', only the hours they are awake count for the purposes of deciding whether they are being paid the national minimum wage.

Following this shock ruling, employers should count only the hours that sleep-in employees (such as carers in a residential carehome) - with no specific duties to perform during their shift - are awake, when calculating whether they are being paid the national minimum or living wage, following a shock ruling from the Court of Appeal.

Case ref: Royal Mencap Society v Tomlinson-Blake [2018] EWCA Civ 1641

Monitoring disabled employees' work and workflow can be a reasonable adjustment for the purposes of discrimination law

Employers are legally required to make 'reasonable adjustments' for disabled employees, to alleviate the effect of their disadvantage. The employers may have to change how things are done, make physical changes at work, or provide equipment or help to the employee. Whether an adjustment is 'reasonable' depends on the circumstances.

In this case the employee was disabled by reason of his epilepsy. The employee asked his employer to monitor his work and workflow, to ensure that he was not being overloaded. The employer refused, arguing that this was not a reasonable adjustment.

The Employment Appeal Tribunal disagreed. It ruled that monitoring work activity and work-flow was capable of being a step in the process of making reasonable adjustments, as it was a reasonable step for the employer to take to stop the employee getting into difficulties at work.

Employers should consider monitoring disabled employees' work and workflows as part of the process of considering 'reasonable adjustments' for them at work

Case ref: Watkins v HSBC Bank Plc UKEAT/0018/18/DA

Voluntary overtime should be included when calculating holiday pay in certain circumstances

The Employment Appeal Tribunal (EAT) has found in favour of employees claiming that voluntary overtime should be taken into account when calculating their holiday pay, as it was part of their 'normal remuneration' because it was paid over a 'sufficient period of time'. The law says that the underlying reason for the holiday pay rules is to ensure holiday pay should correspond to normal remuneration received while not on holiday, so there is no financial disadvantage to taking a holiday. Where patterns of work – albeit voluntary – prevail over a sufficient period of time, and on a 'regular and/or recurring basis', they can be 'normal', so that overtime pay normally received for that work should be included when calculating holiday pay.

Employers should take voluntary overtime into account when calculating holiday pay if it is sufficiently longstanding, and regular or frequent so as to qualify as normal remuneration

Case ref: Flowers v East of England Ambulance Trust UKEAT/0235/17/JOJ

New guidance: Acas publishes new overtime guidance

Employers will welcome new guidance from Acas about overtime. The new guidance addresses key questions about overtime, including mandatory and voluntary overtime, limits on how much overtime can be worked, payment for overtime, part-time workers and overtime, and the impact of overtime on holiday pay calculations.

View the guide on the Acas website.

Employee can be summarily dismissed for gross misconduct following a series of acts, even if none amounted to gross misconduct on its own

A consultant surgeon of 15 years' standing and no previous disciplinary history was dismissed for gross misconduct. This followed an external investigation that found he and four others had not followed new departmental rules, and another investigation in which 17 specific allegations were made against him. By the time his disciplinary hearing took place 16 months later, there had been no further issues.

His claims of unfair dismissal, wrongful dismissal and race discrimination were dismissed. The Employment Appeal Tribunal confirmed that an employee could be summarily dismissed for gross misconduct even though there was no one act that amounted to gross misconduct on its own, provided there was a series of acts that cumulatively did so.

In this case, the disciplinary process had revealed grossly careless and negligent actions, and a final written warning was unlikely to be effective because of the employee's wilful attitude. The relationship of mutual trust and confidence between employer and employee had therefore been undermined, and the dismissal was within the range of reasonable responses by an employer in the circumstances.

Employers dismissing an employee for gross misconduct in circumstances where there is no act that on its own amounts to gross misconduct, should ensure the dismissal is based on a cumulative series of acts which, taken together, undermine the mutual trust and confidence which employees and employers should have in each other, or the dismissal may be unfair.

Case ref: Mbubaegbu v Homerton University Hospital NHS Foundation Trust, UKEAT/0218/17

Court ruling on interpretation of wills highlights risks of loose wording

A testator had divorced his wife and a court order was made in 2007 requiring him to pay annual maintenance, adjusted for inflation, for his two children until they reached 18 or finished their college education. He also had to pay their school fees, and agreed to maintain and assign his life insurance for the benefit both of his children and his ex-wife.

He married again, but fell seriously ill in 2012. Despite his divorce and remarriage, his two children spent a lot of time with him during his illness.

He made the will in 2014 when he was so ill he could no longer work. At roughly the same time, he stopped paying maintenance (and the school fees), as he could no longer afford it, and applied to the court to vary the maintenance order. However, he died before the court could make a ruling.

One clause in his will said:

"I give to my daughter … and my son … as shall survive me free of all taxes Maintenance to be paid in relation to the current court order as may be amended in time, therefore if the maintenance is reduced then the reduced level can be accounted for."

After he died, the Court of Appeal had to decide what this clause meant. It ruled that the test to apply when construing a will is virtually the same as the test applied when construing a commercial contract. The Court found that the clause showed the testator understood when he made his will that maintenance payable to children under a court order would not automatically survive his death, but that he wished it to continue to be paid anyway, despite the fact he had stopped paying maintenance and applied to reduce the payments.

It therefore found he intended his estate to continue paying sums equivalent to the maintenance he was paying before his death under the 2007 court order, and the effect of the clause was to gift annuities to his children on the same terms.

Such problems with potential ambiguities are more likely to occur with DIY wills, or those drafted in a hurry at the last minute, when people can be stressed and often emotional. Proper professional advice is strongly recommended to ensure each clause is drafted clearly and unambiguously - or risk the courts interpreting the will, based on an objective test of what the will-maker must have intended the words to mean.

Case ref: Tish v Olley [2018] EWHC 1069

New guidance: Guidance that landlords must give to new assured shorthold tenants has been updated

Landlords entering into ASTs must provide their tenants with a copy of How to rent: the checklist for renting in England at the beginning of every new tenancy. Failure to do so can prevent a landlord from being able to take back possession of the property under landlord and tenant laws.

The guide has recently been updated, and landlords should ensure they provide new tenants with the latest version.

There is no legal requirement to resend the guide to existing tenants because it has been updated, or on renewal of the tenancy, although it is good practice to do so.

The Government has also published three supplementary guides:

New law: Landlords of properties let under assured shorthold tenancies face new rules from October

Landlords need to make changes to their processes, and obtain necessary certificates, in view of new assured shorthold tenancy (AST) rules coming into force from 1 October 2018.

Landlords wishing to end an AST can serve a 'section 21 notice' on tenants once the initial term of the tenancy has ended. This entitles them to use the accelerated 'no fault' possession claim procedure in the County Court if the tenant does not leave.

Under the forthcoming rules, for ASTs granted (or renewed) on or after 1 October 2015:

  • Landlords cannot serve a section 21 notice if they have received a notice requiring them to make repairs to their property (to avoid 'retaliatory evictions' by landlords).
  • They cannot give a section 21 notice during the first four months of an AST.
  • They must act on a section 21 notice within six months of giving it.
  • They must use a prescribed form (Form 6A) section 21 notice (not their own form).
  • Landlords must give tenants of all ASTs, whenever they were entered into, copies of the relevant Energy Performance Certificate and Gas Safety Certificate for their properties.

Landlords are also required to give new tenants a copy of the government publication, How to Rent: the checklist for renting in England, which has recently been updated.

New guidance: New toolkit published on drugs, alcohol and tobacco in the workplace for employers

Employers will welcome a new, freely available toolkit to help them deal with drugs, alcohol and tobacco abuse in the workplace.

The new toolkit, published by Public Health England and Business in the Community, provides a checklist of practical steps for employers to take, including how to engage with the workers concerned. It sets out a framework for a Drugs, Alcohol and Tobacco policy, and helps employers decide on reasonable adjustments if employees are absent from work due to substance abuse. It also lists key UK laws on drugs and alcohol in the workplace, and provides useful case studies.

You can download Drugs, Alcohol and Tobacco: a toolkit for employers, along with the other six toolkits in the series, from the Business in the Community website.