A reminder that the National Minimum Wage (NMW) increases next month. With effect from 1 October 2009 the rates are as follows:

• adult rate (for those aged 22 and over): increases to £5.80 per hour
• youth rate (18-21): increases to £4.83 per hour
• rate for those aged 16 and 17 years: increases to £3.57 per hour.

In addition, as from this date, all tips, service charges, gratuities and cover charges, whether discretionary or mandatory, will no longer count towards the NMW.

For further details on the NMW, see: /docs/legal/minimumwage.html

And see below for interesting developments on NMW pay for those who sleep on the premises.

There has also been an increase in the minimum pay rate for apprentices (apprentices under the age of 19 and older workers in the first year of an apprenticeship are exempt from the national minimum wage). The minimum pay rate for apprentices is now £95, (from £80).

Finally, a reminder that the cap on a week's pay (used for calculating statutory redundancy payments and tribunal basic awards) will be increased to £380 with effect from 1 October 2009.

But there is one reduction! The cost of a standard CRB disclosure will be reduced to £26.00 as from 1 October 2009.

The revised Code was due to take effect at the beginning of October, but is still subject to Parliamentary approval. The Code sets out details of right to time off with pay and how such payments must be calculated.

For further details see www.acas.org.uk/index.aspx?articleid=2391

For further guidance on working with unions, see: /docs/guides/unions.html

The government has announced that it intends to introduce a 'workplace parking levy'. Any business with 11 or more staff parking spaces will be charged £250 a year for each space, a cost which could rise to £350 within two years. Each business is free to decide whether or not to pass the cost on to its employees.

The tax is to be piloted in Nottingham in 2012, then Birmingham, Manchester, Bristol, Leeds, Newcastle, Liverpool and Sheffield.

As could be expected, many business representative groups are opposing the scheme, which has been described by the Forum of Private Business as 'little more than a stealth tax'.

National Minimum Wage and sleep-in payments

There has been so much conflicting advice and case law on this particular subject - and we still regard this as a minefield! If you do not have employees who sleep on site, we would suggest that you skip this bit of the newsletter, as it is complicated - but we've tried to cover this in detail for those clients to whom this is relevant.

In a new decision, the Employment Appeal Tribunal, in Smith v Oxfordshire Learning Disability NHS Trust, has further considered the situation regarding payments for "sleep in".

Mr Smith was a care worker in a residential home. He had a part-time day job, for which he was paid £517.43 per month, based on a normal working week of 15 hours (so an hourly rate of £7.96 per hour). In addition to this, he was also occasionally required to 'sleep in' at the home, for which he received a 'sleep-in payment' of £25 for 9 hours, (equivalent to £2.77 per hour) plus a further 'disturbed night' payment if he had to attend to an emergency during the sleep-in.

Mr Smith claimed that he was being paid less than the NMW, because the sleep-in payment was an allowance - so should not be counted when checking his NMW payments.

The original tribunal dismissed his claim, which was appealed to the Employment Appeals Tribunal (EAT).

Regulation 15(1A) of the NMW Regulations, says:

"In relation to a worker who by arrangement sleeps at or near a place of work and is provided with suitable facilities for sleeping, time during the hours he is permitted to use those facilities for the purpose of sleeping shall only be treated as being time work when the worker is awake for the purpose of working."

We have referred clients to this in the past, and it clearly suggests that hours spent asleep should NOT be included in the calculation. However, both the NHS Trust and Mr Smith agreed that the sleep-in hours should be included, given two previous decisions, one of the Court of Appeal and one of the EAT:

• British Nursing Association v Inland Revenue - the Court of Appeal - nurses at home overnight were treated as 'working' while both waiting for phone calls and taking phone calls and

• Burrow Down Support Services v Rossiter - EAT - a 'night-sleeper' in a care home, who could sleep all night but had to get up in the event of an emergency, was treated as working throughout the night.

The next question was whether Mr Smith's sleep-in payment of £25 should be included when checking the average hourly rate of pay for NMW purposes. The Trust argued that it should; Mr. Smith argued otherwise. If the Trust was correct, the NMW would only be breached if Mr. Smith had 6 or more sleep-ins in a month; if Mr. Smith was correct, his salary every month was in breach of the NMW.

Under the NMW Regulations, 'any money payment paid by the employer to the worker by way of an allowance other than an allowance attributable to the performance of the worker in carrying out his work' is excluded from the NMW. An allowance is 'any payment made by the employer to a worker attributable to a particular aspect of his working arrangements'. The three members of the EAT disagreed as to whether the sleep in payment was an allowance - two thought it was not, the other quoted the DTI's guide to the NMW, that allowances may include 'performing special duties over and above a worker's normal duties; being on-call for work'.

If the majority view is correct, the sleep-in payment was not an allowance and should therefore be included in the NMW calculation. If the minority view is correct, the second question was "was it 'an allowance attributable to the performance of the worker in carrying out his work'? The EAT members all agreed on this - if the payment is an allowance, it is attributable to the performance of the worker in carrying out the work.

So, the EAT dismissed Mr Smith's appeal on the basis that:

• if the sleep-in payment was not an allowance, it must be included in the total amounts paid to Mr. Smith when checking his the average rate of pay for NMW purposes, or
• if the payment was in fact an allowance, it was, nevertheless, attributable to the performance of the worker - therefore it still should be included in Mr. Smith's total payments for NMW purposes.

For clients such as care or respite homes, which have staff who sleep-in overnight in case of emergencies, this case prompts a review. In Mr Smith's case, his daytime wages and the sleep-in payment together were still just above the NMW. But had he not worked during the day and been required to just sleep in overnight, he should be paid at least the NMW for the full period, even if asleep the whole time!

The decision suggests that the only way around this is to either combine day or night shifts so that the overall payment complies with the NMW, or to consider changing the sleep in into a night shift, where the workers are required to do productive work during the whole of the shift, including handling any emergencies. The latter would usually be the best option, to avoid complications arising from the Working Time Regulations, where an employee who is called out and whose 11-hour rest period is broken needs to be given the appropriate compensatory rest.

Disability discrimination: dress code

A sales assistant who worked for Abercrombie & Fitch in 2007 has successfully brought a claim of disability discrimination, on the basis of their dress code.

Riam Dean was born without her left forearm. She advised her employer of her disability after getting the job. She said the company agreed she could wear a cardigan to cover the link between her prosthesis and her upper arm. However, once on the shopfloor she was told by a member of the store's "visual team" that she had to take off the cardigan because it broke the firm's "look policy". It was then suggested to her that she work in the stockroom "until the winter uniform arrives".

Ms Dean resigned, and claimed disability discrimination. The tribunal awarded her more than £9,000 in compensation: £7800 compensation for injury to her feelings, £1077 for loss of earnings and £136 for wrongful dismissal.

Tribunal claims: awarding costs

It is rare for tribunals to award costs, but we have had two cases of this recently!

The first was Daleside Nursing Home Ltd v Mathew which held that it was perverse for a tribunal not to award costs where the central allegation of racial abuse was a lie.

In a further case, Dunedin Canmore Housing Association v Donaldson, the EAT said that it was perverse for the tribunal to have refused to award costs where the claimant's assertions that she had not disclosed details of her compromise agreement in breach of a confidentiality clause were false.

The claimant brought proceedings for breach of a compromise agreement, claiming she had not been in breach of a confidentiality clause. The tribunal rejected her evidence and found she had made disclosures to two people. The EAT reversed the tribunal's decision not to award costs because she had not approached the case honestly and reasonably, and they ordered her to pay her ex-employer''s legal costs.

TUPE: mobility clauses

The case of Tapere v South London and Maudsley NHS Trust looks at contractual mobility clauses in the context of a TUPE transfer.

Ms Tapere was employed by a primary care trust (PCT), on a contract which expressly stated that she may be required to perform her duties, either temporarily or permanently, at other locations within the PCT. Her employment was transferred to an NHS trust as a result of a TUPE transfer.

Following the transfer, Ms Tapere was told that she would transfer from Camberwell to Beckenham. She claimed that this would adversely impact on her childcare arrangements and eventually resigned, claiming constructive dismissal.

The original tribunal dismissed her claim, and said that the NHS trust could rely on the wording of the mobility clause and move her to Beckenham, which was not significantly further from her home and did not materially increase her journey to work. They felt that there had not been a substantial change to her working conditions to her material detriment.

The EAT disagreed. They said that the mobility clause should be interpreted as at the time the contract was entered into, thereby restricting it to the location of the PCT rather than the NHS trust to which the employee transferred. They also said that the question of whether the change was to the employee’s material detriment was not an objective test but had to be considered from the employee’s point of view.

Unfair dismissal - pensions benefits

We reported on a recent case (Roberts v Aegon UK Corporate Services Ltd) where the loss of a final salary pension scheme was considered when making a compensation award to a claimant who had obtained a new job after being unfairly dismissed and who had not suffered any loss of earnings, but where the package included a money purchase, rather than a final salary scheme. The ongoing pension loss resulted in a significant award.

The Court of Appeal has now overturned the EAT decision, and confirmed that a final salary pension scheme is not a unique benefit but, rather, an important part of the total remuneration package. Consequently, different tests should not apply to different aspects of the remuneration package when awarding compensation.

Unfair dismissal - extension of time limit

In Teva (UK) v Heslip, the claimant, who had been dismissed on grounds of redundancy, discovered that her old job was being carried out by someone else after the expiry of the three-month deadline for presenting an unfair dismissal claim. The EAT ruled that she should be allowed to bring her claim and said that where information comes to light after a claim's time limit expires, but which genuinely and reasonably causes a change in what the claimant believes to be true, the claim should proceed, provided it is presented within a "reasonable" time.

We've added last month's hot topic, how to manage the swine flu pandemic, to our health and safety section.

We are also currently in the process of reviewing and updating all of our template letters. If you tend to download these and keep them on your computer, do bear in mind that we are constantly improving these, and you should work straight from the website in order to ensure you use the most up to date template.

The Department for Children Schools and Family has produced a new booklet providing guidance on all aspects of employing children. This covers everything from the types of work children can (and cannot) do, age limits, the number of hours they can be required to work, holiday requirements and work breaks, school leaving age, permits to specific health & safety requirements and assessments and work experience.

See: publications.everychildmatters.gov.uk/eOrderingDownload/Child_employment09.pdf

Note that the guide concentrates on legislation specific to the employment of children under school leaving age - other general employment law considerations will apply equally to all employees (for example, discrimination law). Any local authority byelaws should also be checked before employing a child.

For more information on working with young workers, see: /docs/legal/youngpersons.html For information on managing work experience placements, see: /docs/guides/experience.html

Research conducted by the Association of Consulting Actuaries has found that employers have closed 87% of defined benefit pension schemes to new members and increasing numbers are also closing the schemes for their existing workforces. One fifth of employers seeking to cut their costs said they were considering moving existing employees on to defined contribution schemes; others said they were considering moving staff to career average schemes.

On the subject of pensions, if you currently don't offer anything other than a stakeholder scheme to your employees, do note that you will need to prepare and budget for the forthcoming mandatory personal accounts scheme, planned to be introduced in 2012. A temporary body, the Personal Account Delivery Authority (PADA) has been set up to oversee the introduction of the personal accounts scheme. During autumn 2009, the PADA will be running a programme of meetings with key audiences, including pension advisers, trade bodies and employers, to explain the likely features of the pension scheme, clarify misunderstandings about its role and explore how the personal accounts scheme might be used.

For more information on pensions, see: /docs/legal/pension.html

You may have read some of the recent press coverage on the difficulties of young people in finding work.

A survey of almost 5000 job applications to the financial sector found that 19% of cvs contained lies or embellishments - and the biggest increase (30% increase) was among those aged under 21. The most common "embellishments" were false employment dates and academic qualifications.

Such factual inaccuracies are easy to check - ensure that you check the dates of employment when taking up references, and ask for original certificates for qualifications if these are relevant and necessary to the application.

For more information on taking up references, read: /docs/guides/newstarterreferences.html and take a look at our template reference forms, see: /docs/TPdocuments.html