Monthly Employment Public Law Newsletter - September 2014
It may have been back to school for many last week, but the courts have not had much of a break over the summer…
Published 13 November 2014
Last week we reported the decision in the Bear Scotland Ltd v Fulton (and other conjoined cases) where the EAT confirmed that regular mandatory overtime should be included in holiday pay.
The decision was much anticipated and has attracted extensive media coverage. In this alert, we look at the specific implications for the Health Sector. We also deal with how NHS bodies should respond to the BMA letter demanding backdated holiday pay for doctors.
Broadly there are 3 categories of staff to consider:
This will be the majority of staff in the NHS. Under AfC para 13.9:
"Pay during annual leave will include regularly paid supplements, including any recruitment and retention premia, payments for work outside normal hours and high cost area supplements. Pay is calculated on the basis of what the individual would have received had he/she been at work. This would be based on the previous three months at work or any other reference period that may be locally agreed."
So provided NHS bodies have been paying in accordance with AfC they should be compliant with Bear Scotland for most employees. However:
The national contracts for doctors (both consultants and junior doctors) are silent on the issue of pay for annual leave (which will vary between 5 and 6 weeks annual leave). A number of NHS bodies calculate pay for doctors in the same way as they calculate holiday pay for AfC employees. Again these NHS bodies should generally face little exposure subject to the points made above about AfC staff.
However, where NHS bodies have paid doctors for annual leave based on basic pay only, they will face exactly the same risk of claims as private sector employers who have not paid annual leave in accordance with Bear Scotland.
This is something the BMA are alert to and they are writing to NHS bodies to ascertain their position - so this is not an issue that can be ignored. Our view would be that NHS bodies should not rush to respond to this immediately but simply confirm in due course that they are reviewing their arrangements to ascertain the position. If they are correctly paying there should be no issue. If they are not, then a non-committal response may mean the 3 month period has elapsed and so claims are out of time. We can help with any further responses if these are needed.
Where an NHS body directly engages its own bank staff and other workers (whether they are employees or workers) regardless of whether these staff also have substantive employment with the NHS body, they will have a right to holiday pay calculated in accordance with Bear Scotland principles. This means holiday pay should include any regular supplements or allowances (e.g. unsociable hours payments and mandatory overtime).