In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
As employer pension contributions are not received directly by an employee but paid into a pension fund, it has been established practice to exclude such payments from the calculation of a week’s pay (for example when calculating statutory redundancy pay or holiday pay). However, in University of Sunderland v Drossou UKEAT/0341/16, the EAT has upheld the employment tribunal’s decision to include employer pension contributions in the calculation of a week’s pay.
In this case, Ms Drossou was dismissed by the University on the grounds of an irretrievable breakdown in working relationships. The tribunal found that she had been unfairly dismissed and ordered compensation. When calculating Ms Drossou’s compensation, the tribunal found that a week’s pay should include employer pension contributions. Upon the University appealing the decision, the EAT agreed with the tribunal’s reasoning and confirmed that a week’s pay should include employer pension contributions.
This case alters a longstanding principle increasing the value of a statutory week’s pay under the Employment Rights Act 1996. A number of payments and remedies are based on the statutory week’s pay and, consequently, these will be increased. These include:
- Statutory redundancy payments;
- Holiday pay under the Working Time Regulations;
- Compensation under TUPE, the protective award made for failure by the employer to inform or consult; and
- Basic award and determining the upper limit on the compensatory award made for a successful unfair dismissal claim.
The implications of this decision will be of particular interest to employers who make large contributions under a defined benefit pension scheme. The average contribution to defined benefit pension schemes is 21.2% according to a 2015 ONS survey. A week’s pay for employees who participate in these schemes could, therefore, potentially, be over a fifth as much before this ruling.
There may be further litigation to challenge the validity of the EAT’s judgment but, in the meantime, employers should be aware of the adjustment to the calculations.
A local authority recently received a "roasting" by the Pensions Ombudsman for their delay in processing an employee’s ill-health retirement pension, following her diagnosis with advanced cancer.
The Times is looking for three or four charities to feature in their editions running in December 2019 and early January 2020.
Cliff Mills defines and talks about the importance of social value in his blog, and its potential within Greater Manchester.
Following a power outage at Anthony Collins Solicitors’ (ACS) Birmingham office, our employees and partners currently have limited functionality, including no access to emails.
Joint ventures present an opportunity for housing associations to build organisational capacity, the revenues from which could help deliver on wider social housing commitments.
Residents are now unable to make applications to prohibit landlords from seeking to recover the cost of legal proceedings through the service charge on behalf of other residents, without consent.
Natalie Barbosa summarises some of the legal challenges facing fundraisers in the charity sector.
We hosted a breakfast roundtable with Insider Midlands magazine that had attendees from a range of organisations addressing housing needs in the Midlands. The discussion explored JVs in more detail.
The decision of the Court of Appeal in The Harpur Trust v Brazel & Unison has made clear that employers can no longer legally calculate part-time holiday based on 12.07% of hours worked over a year.
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