A review of the last 12 months of employment law might come as a surprise to many in the retail industry, especially as the Government promised reducing red tape. But the sector is facing the same, if not an increasing, level of rules and regulations that generally apply to all businesses irrespective of size.
Employment law is constantly developing and it can be hard for employers to stay on top of all the changes. Esther Smith, partner and employment specialist from TLT, outlines some of the key issues that those in the retail sector should be aware of.
One area that regularly causes frustration among employers in the retail sector is holiday pay, particularly with so many part-time employees. The interpretation of the domestic ‘Working Time Regulations’ is constantly being developed through European law and is at times is confusing, especially the issue of accumulating holiday pay during sickness absence. In addition recent tribunal decisions regarding the inclusion of commission payments and non-contractual overtime when calculating holiday pay are also causing employers some difficulty.
Another issue that employers should be prepared for is the extension of flexible working rights to all employees. Whilst possibly not giving rise to a real threat of more tribunal claims, it will be an administrative burden to employers as handling an increased volume of requests is going to take time and management commitment.
Positively, there has been a significant decrease in tribunal claims being brought by ex-employees. Whilst originally publicised as being a 79% reduction in claims, this drop off has levelled out as time has passed. But we are still looking at over a 50% decrease. The impact of the introduction of fees for commencing a claim has inevitably had a major impact on this.
This is particularly prevalent in the retail sector where, on the whole, businesses are used to facing a high number of relatively low value claims, from low paid or part time employees. Requiring claimants to pay £250 to instigate their claim for unfair dismissal, with a further £950 being due before the hearing, has undoubtedly made some people think twice.
Cap on compensation
There are other factors at play here. The cap on compensation to 12 months gross pay, or £76,574 whichever is the lower, for unfair dismissal claims has also managed expectations of claimants. This has made claims easier to settle before they become disputes.
This has been further encouraged by the implementation of compulsory conciliation so that claimants now have to apply to ACAS for conciliation before they are able to lodge a tribunal claim. This hurdle may prevent the speculative claimants going to tribunal.