Further developments regarding Holiday Pay claims, Section 1 particulars, Pay and Conditions 2020, COVID quarantine and new rules on Public Sector Exit Payments.
We have also revisited our guidance note on restructures and redundancy, download a copy here.
TTO Holiday Pay calculation, claims and the Risk Protection Arrangement (RPA)
Most clients should be aware of the case of Harpur Trust v Brazel and its implications. In a nutshell the Court of Appeal found that holiday pay for term time only (TTO) workers should be calculated using their average earnings over a 12 week period and that it should not be a pro-rated.
In the case Ms Brazel, a zero hour’s contract visiting music teacher, argued that her holiday pay should not be pro-rated on the basis of hours worked. Instead she said the correct approach was to take her average weekly remuneration for the 12 weeks prior to the calculation date (disregarding any period when she was not working) and multiplying this by 5.6 weeks, the full time statutory holiday allowance. As she worked around 32 hours per week, using this calculation brought her holiday pay to around 17.5% of annual pay. By comparison the holiday pay for staff working for the full year was 12.07%, meaning Ms Brazel’s calculation left her substantially better off than a comparable full time employee. Nevertheless the Court of Appeal agreed with her approach and found it consistent with the Working Time Regulations 1998. The case is currently subject to an ongoing appeal to the Supreme Court however until such time that the decision is overturned it remains the correct approach to calculating holiday pay for TTO staff.
Clients should also be aware that from 6 April 2020 the 12-week reference period used to calculate statutory holiday pay was extended to 52 weeks (or the number of complete weeks for which the worker has been employed, if that period is less than 52 weeks, ignoring any period when no wages were payable).
We know that following this case many clients have already reached agreement with the unions about calculating holiday pay for TTO staff. However this does not prevent affected staff from bringing claims for backdated holiday pay before the calculation was changed. Whilst we recognise that most clients will have inherited the holiday calculation formula from the local authority, by the operation of TUPE any claim arising out of that is against the oincoming employer.
Over the Summer term we have seen an increased number of back pay holiday pay claims being brought at the employment tribunal. What is concerning is that in some instances the RPA has said that there is no cover for these types of claims because RPA cover excludes any compensation award relating to non-payment of money due under a contract of employment or statutory provision. As the Court of Appeal found that the correct calculation of TTO holiday pay is consistent with the Working Time Regulations 1998 any claims arising out of the Harpur Trust decision may fall into the RPA exclusion.
This potentially places schools, trusts and dioceses in a precarious position as it means that unless the RPA accepts the claim this will be an uninsured loss and payment of any monies due will need to come from the employer’s own pocket.
We strongly advise clients to:
- Take specialist advice as soon as possible;
- Check for any claims that may have come in during school closure;
- If a claim has been made notify RPA immediately and request cover;
- Seek to agree with unions and employees early settlement of any back pay claims to avoid litigation;
- File a response and seek a ‘stay’ of proceedings until the appeal in Harpur Trust has been decided.
Section 1 particulars
We remind clients that from 6 April 2020 employers are required to provide employees and workers with a “written statement of particulars of employment” (s.1(1) ERA 1996). This right applies to all employees and workers, including zero hours/casual workers such as exam invigilators or specialist teachers.
Those starting work on or after 6 April 2020 must be given certain section 1 particulars (the “principal statement”) no later than their start date. Other section 1 particulars that do not fall into the principal statement category can be provided later, but in any event must be provided no later than two months after the beginning of the employment or engagement, even where the employment or engagement ends before that date.
We encourage clients to review their contracts so as to ensure that they meet the requirements of s.1 ERA 1996. We can assist you with this exercise including providing a template suite of contracts.
NJC Pay Negotiations and Teachers’ Pay and Conditions Document 2020
The NJC pay negotiations for Green Book staff have now concluded and proposed changes to the Teachers’ Pay and Conditions Document for September 2020 are yet to be finalised.
In light of this we consider that now is a good time for clients to start thinking about implementing (or updating) a pay policy. Pay policies are useful tools to help you navigate issues and manage disputes about pay, particularly where they relate to matters on which the national agreements may be silent. A pay policy will also ensure that your staff understand the annual review and pay increase process and that you treat employees fairly and consistently.
Examples of issues that may arise include:
- is an employee who is in a period of notice or who is subject to a disciplinary or performance management process entitled to a pay award;
- is an employee who has left employment entitled to a backdated pay award where the agreed pay award covers a period when they were still employed;
- will Oftsed ratings affect pay awards for senior staff.
If you would like a review of your existing pay policy or are considering implementing a pay policy please contact the Schools HR team on firstname.lastname@example.org or 0345 026 8690.
COVID19: travelling abroad and isolation
We know most of our clients have been working very hard to prepare for full reopening of schools in Autumn term. We remain available to support you at this time.
One common issue that we are now seeing related to Covid19 is staff travelling abroad. Many of our clients are grappling with how to strike a balance between encouraging staff to take leave and ensuring that staff return to work when they are contracted to, to minimise disruption to operations, pupils and other employees.
Current DfE Guidance provides that where it is not possible to avoid a member of staff having to quarantine during term time, school leaders should consider if it is possible to temporarily amend working arrangements to enable them to work from home. Whilst home working would be the ideal solution, we recognise that this may be difficult (or even impossible) for teaching staff when schools fully reopen and all pupils return.
We recommend that clients implement a policy dealing specifically with booking travel abroad during Covid19 so that staff are clear on what is expected of them, how absence related to having to isolate on return from abroad will be dealt with and what pay staff will be entitled to. Covid19 is far from over and school leaders should be thinking about potential staff travel during the Autumn half term and beyond.
Isolating on return from abroad is not sickness absence and should not be treated as such.
Public Sector Exit Payments
Whilst on the agenda for some time, the Government has now released draft regulations to restrict the aggregate combined amount of an exit payment in the public sector to £95,000, so no more “six figure payoffs” for senior personnel as has been reported recently. In the draft Restriction of Public Sector Exit Payments Regulations 2020 published on 27 July 2020, the cap will apply to the total of any of the following kinds of payments:
- any payment on account of dismissal by reason of redundancy (but excluding any element which equates to the statutory redundancy payment);
- any payment to reduce or eliminate an actuarial reduction to a pension on early retirement;
- any compensation payment for loss of office under agreement (but not under a COT3);
- any severance or ex-gratia payment;
- any payment to extinguish any liability to pay money under a fixed term contract;
- any payment on voluntary exit (the proverbial “golden goodbye”);
- any payment in lieu of notice that exceeds one quarter of the relevant person’s salary;
- any other payment not falling in one of the categories above.
The following payments are excluded:
- death in service;
- compensation for personal injury;
- accrued annual leave.
The Regulations are clear that the cap applies to the gross amount of any qualifying payment and given this includes pension benefits also, it might not be that rare for the Regulations to catch payments to school employees (though we’d expect it to be an issue for the most senior leaders only). The Regulations include a power to relax the cap in exceptional circumstances with Treasury approval and it’s probably worth noting that where a non-contractual payment exceeds £50,000 the approval of the ESFA is also required.
The Regulations mean school employers will have to be careful how they structure packages for departing personnel and it would be sensible to get advice to avoid an inadvertent breach of the Regulations and/or the Academies Financial Handbook (or delegated authority under an LA’s Scheme for Financing Schools).