Here is the employment law update – March 2017 – Holiday pay and statutory rate changes for 6 April 2017
Changes in Compensation Limits from April 2017
The Government has set out the new rates for compensation payments in the Employment Rights (Increase of Limits) Order. The following changes will come into force effective from the 6th of April 2017.
- The limit on a week’s pay for calculating redundancy and unfair dismissal basic award is changing from £479 per week to £489 per week
- The minimum basic award for unfair dismissal related to health & safety and trade union activities is changing from £5,853.00 to £5,970.00
- The maximum basic award for unfair dismissal and statutory redundancy payment is changing from £14,370.00 to £14,760.00
- The maximum compensatory award for unfair dismissal is changing from £78,962.00 to £80,541.00
The new rates will only apply for dismissals that are effective after the 6th of April 2017.
Holiday Pay Ruling
Following recent developments, the Supreme Court has refused to give British Gas permission to appeal against the earlier ruling of the Court of Appeal that confirmed that contractual results-based commission should be taken into account when calculating holiday pay (British Gas V Lock).
This means that the decision is final and employers should be taking into account contractual results-based commission when calculating holiday pay.
Some questions however remain unanswered by this ruling. There is still no clear guidance on what the appropriate reference period should be for the calculation.
However, there may be light at the end of the tunnel as according to reports, the Employment Tribunal should make a decision on the outstanding matters later this month. This should bring more clarity to employers on calculating holiday pay for those on results-based commissions.