UK: ECJ cases raise doubts over the inclusion of regular voluntary overtime in holiday pay calculations and over record-keeping requirements

Comments made in an ECJ judgment on a German working time case have raised doubts as to the correctness of the UK Employment Appeal Tribunal’s rulings that pay during the 4 weeks EU-derived statutory holiday must include an amount for voluntary overtime (if sufficiently regular and paid over a sufficient period). In Hein v Albert Holzkamm, the ECJ noted that remuneration for overtime of an “exceptional and unforeseeable nature” need not be included when calculating holiday pay, but that overtime pay should be included where a worker’s contract obliges them to work overtime “on a broadly regular and predictable basis and the corresponding pay constitutes a significant element of the total remuneration”. Domestic legislation does not need to be interpreted as giving the right that pay received for overtime work be taken into account unless these conditions are satisfied. Continue reading

UK: workers may be entitled to carry over statutory holiday if they have not been encouraged to take it

The ECJ has ruled that workers cannot be deprived of paid statutory holiday entitlement on the termination of employment or at the end of a particular reference period or authorised carry-over period, unless the employer has ensured “specifically and transparently” that the worker is actually given the opportunity to take the leave. This means encouraging workers, formally if necessary, to take their leave entitlement and informing them, accurately and in good time, that they will lose it if they don’t take it. The burden of proof will be on the employer to show that “it has exercised all due diligence” in order to enable the worker actually to take his entitlement; loss of entitlement will only be lawful if the worker deliberately declines to take their leave knowing the consequences. Continue reading

Japan: Differing Conditions Between Permanent and Fixed Term Employees

On 14 September 2017, the Tokyo District Court interpreted and applied the meaning of “unreasonable differences” to the benefits enjoyed by permanent and fixed term employees at Japan Post. The decision provides guidance on which benefits are exclusively available to permanent employees and which benefits, when not provided to both categories of employees equally, will result in a breach of the Labour Contract Act. This decision is of particular significance at the moment as employers are currently expecting many long term fixed term employees applying to become permanent employees. This ruling, however, stipulates that companies will no longer be able to provide fewer benefits to fixed term employees.

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India: Maharashtra Adopts Model Shop and Establishments Legislation

By way of the Maharashtra Shops and Establishments Act, 2017, the state of Maharashtra has adopted the Central Government’s model legislation intended to increase the ease of doing business and boosting employment opportunities for women. The Act represents significant reform of the prevailing legislation and employers should take note of the changes to ensure compliance and to best utilise the flexibility afforded by the new regime.

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UK: No short cuts when calculating holiday pay for casual workers

The EAT in Brazel v The Harper Trust has ruled that employers must calculate holiday pay for term-time (or other casual) workers using the normal rate of pay averaged over the 12 weeks prior to holiday being taken, in accordance with the express wording of the Working Time Regulations. It is not permitted to in effect pro rate the full –time annual entitlement or cap payments at 12.07% of annualised hours (as suggested by Acas guidance), even though this may mean part-time workers are treated more favourably than full-timers.

Hong Kong: Labour Department Enforcement Actions in 2017

The Legislative Council Panel on Manpower has released a report on enforcement actions taken by the Labour Department during 2017 (Paper) which shows an increase in the number of convictions for breaches of the Employment Ordinance (EO) and other labour legislation. The Labour Department has committed to taking continued enforcement action against employers and responsible individuals to ensure compliance as well as sustained measures to increase employee awareness of their rights and avenues for remedy under labour legislation.

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Taiwan: Further Changes to the Labor Standards Act

Prompted by criticisms from both employers and employees to its amendments to the Labor Standards Act (the “Act”) in December 2016 (the “first amendments”), the Taiwanese Government proposed further revisions to the Act (the “further amendments”), less than a year after the first amendments were implemented. These recent amendments will take effect from 1 March 2018 and relate to rest days, overtime work and overtime pay and are aimed at providing employers greater flexibility in conducting their businesses and in managing the work schedules of their employees.

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UK: gig economy developments, including important ECJ ruling on holiday pay, Uber and Deliveroo rulings on worker status, and delay to government proposals

The ECJ has agreed with the Advocate-General’s opinion in King v Sash Windows that workers denied paid holiday can carry over their 4 weeks’ statutory holiday entitlement indefinitely and be paid in lieu of the entire accrued untaken entitlement on termination.  The ruling has significant financial implications for employers with staff potentially mis-categorised as self-employed, particularly where they have a stable and long-serving workforce. Continue reading

UK: Statutory holiday pay must take account of voluntary overtime

The EAT has upheld first instance tribunal decisions that the calculation of statutory holiday pay (for the 4 weeks’ EU-derived holiday) should reflect voluntary overtime, voluntary standby and voluntary call out payments, provided that the work has been undertaken with sufficient regularity to have become part of the employee’s normal pay. The Working Time Regulations must be construed purposively to this effect.

Previous case law established that commission and certain supplementary payments had to be included in the calculation of “normal remuneration” because they were amounts for work which was “linked intrinsically to the performance of tasks which the worker is required to carry out under his contract of employment”.

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