Companies who keep their offices open over the festive period may have to deal with conflicting holiday requests, and with the economy still having an impact on many, those looking to scrap Christmas bonuses will have to be cautious about how they do it so they avoid costly tribunal claims.
HOLIDAY ENTITLEMENT
Over the festive period, or at any other time, employees do not automatically have the right to take their holiday entitlement without your agreement. If you do set restrictions on when holiday can be taken, bear in mind the need to avoid indirect discrimination and ensure that you do not make decisions based on employees’ race, sex, etc., or by way of ‘favouritism’.
The most reasonable approach is to make a decision based on who worked the time last year. If you operate on a first come, first served basis, this may prejudice the less organised members of your staff (which, while not unlawful, is not positive in terms of employee relations).
If the office has to close over the Christmas period, explain clearly to all staff the benefits to the business of closing over this period which are not related to the religious period e.g. that it is financially sensible to close. If there is no business requirement to shut over Christmas, consider allowing employees to take their annual leave at other times of the year.
Employees also do not have an automatic right to carry over any outstanding leave into the following leave year. If you have holiday entitlement more generous than the statutory minimum of 28 days, you may allow your employees to carry over some of their untaken days, however, this should be set out in the contract of employment. You are not allowed to exchange any untaken statutory holiday entitlement for pay.
If you have an employee who is absent due to illness, they are entitled to accrue statutory paid holiday (and possibly contractual) holiday while off work. When they return, they can ask to take this holiday before the end of the leave year or carry it over into the following leave year. Female employees on maternity leave, and working parents on paternity and/or adoption leave, will also have the same rights.
If you need further advice on sick and/or annual leave, you can contact Empire.
CHRISTMAS BONUSES
With a challenging year for most UK businesses, some may find themselves reducing or not paying a Christmas bonus this year.
When deciding, you should initially establish whether or not your employees have a contractual right to be paid one. If their contract states that he or she has a right to a bonus, at a defined amount, you will be in breach of contract if you do not pay one. If the contract specifies that the bonus is only payable at your discretion, then there is greater scope for avoiding or reducing the payment. However, you may still face an argument that there is an implied contractual right to a payment which would normally be down to any established custom and practice.
If the payment of a Christmas bonus is contractual, in addition to a breach of contract claim, an employee can choose to resign due to the non-payment of a bonus and claim constructive dismissal for an alleged breach of contract and mutual trust and confidence. However, unless the bonus is particularly huge, the risk in the current economic climate is fairly low.
Finally, if you choose to withhold or reduce your bonus, or pay them indiscriminately, you may face an equal pay or a discrimination claim under the Equality Act 2010. This is a particular concern to employers given the uncapped nature of discrimination awards. Remember to include any employees on leave, e.g. maternity or sick leave.
Communication, consistency and caution are key to ensure your reasons for not paying a bonus are clear to avoid defending an employment tribunal claim.
Top tips:
- Speak to the workforce and justify the reasons why bonuses are not being paid, or are only being paid to certain staff (avoiding any potential discrimination)
- Review contracts to determine whether or not employees have a contractual right to a Christmas bonus
- Understand that the payment of previous Christmas bonuses may provide the employee with a contractual entitlement to continue to receive one
Empire welcome all feedback and comments and would be happy to discuss any issues that you may feel will impact your business. Please visit our facebook page where we regularly hold discussions relating to the topics covered in our blog posts.
If you have found this post interesting please use the "Share" buttons below to tell your online community about it, there's a good chance they will find it interesting too. Thank you.
You can also follow Empire on Facebook - please click here
No comments:
Post a Comment