January 21 2008 Employment Law Enews

Welcome to the latest edition of Steeles Law Enews.

UNPAID OVERTIME FOR PART TIME WORKERS

The ECJ has recently handed down its decision in Voss v Land Berlin which may have important implications for employers who require employees to work periods of unpaid overtime.

FACTS

Ms Voss worked as a part time teacher and was employed by Land Berlin in Germany. Her contract was for 23 hours a week compared to a full time teacher who was contracted to work 26.5 hours. German law relating to civil service employment stated that overtime may be required in exceptional circumstances but would generally be unpaid. However, if overtime exceeded five hours in a month the employee would be given time off in lieu or if that was not possible, paid additional remuneration. Between 11 January and 23 May 2000 Ms Voss worked between 4 and 6 hours overtime per month. She brought a claim on the basis that any overtime she worked (up to a maximum of 26.5 hours) should be calculated at the same rate of pay as full time workers.

The German court referred the case to the ECJ, to determine whether it is contrary to the principle of equal pay for a part time worker carrying out overtime (but still working fewer hours than a full time worker's normal hours) to be paid less than a full time worker receives pro-rata for the same hours.

HELD

A part time teacher whose normal hours are 23 a week but who works overtime of 3.5 hours receives less pay for those 26.5 hours than a full time teacher receives for the same hours. As a result the ECJ was satisfied that the German legislation gives rise to a difference in treatment that is detrimental to part time workers. This would be contrary to the principle of equal pay unless the legislation could be justified by objective factors.

COMMENT

This case will have major implications for an employer that requires its part time employees to perform unpaid overtime. Assuming part timers are paid the same hourly rate as full time employees, unpaid overtime would result in the part timer being paid less that the full timer would earn pro rata for the same hours. Therefore in the absence of any justification for the difference in pay, this case suggests that an employer should pay the part timer in full until they have done sufficient overtime to equate to the normal working hours of a full timer. This goes further than an earlier ruling of the ECJ where it was suggested that any threshold for paid overtime should be reduced pro rata for a part time employee.

TUPE APPLIES TO TRANSFERS OUTSIDE THE UK

In the first case to consider the point, the EAT has ruled in Holis Metal Industries Ltd v (1) GMB (2) Newell Ltd that TUPE 2006 can apply to a transfer from the UK to a non-EU entity.

FACTS

Newell Ltd ("Newell") had a factory in Tamworth manufacturing tracks, poles and blinds. On the 15 February 2006 Newell's works council was informed that Holis Metal Industries Ltd ("Holis"), a company based in Israel, were interested in buying the track and pole part of the business. On 21 February a letter was sent stating that jobs in the business would go to Israel. A representative from Holis told the affected workers that they would transfer to Holis on 9 April and unless they moved to Israel they would be made redundant. None of the employees moved and therefore they were all made redundant. Claims were lodged against Holis relating to their failure to consult with the affected employees, as required under regulation 13 of TUPE 2006. Holis appealed against the tribunal's finding that that TUPE 2006 applied to the transfer of the business.

HELD

The EAT held that TUPE 2006 can in principle apply to transfers of businesses from the UK to a non-EU entity where the undertaking does not remain in the UK after the transfer has taken place. However the EAT did not decide whether TUPE 2006 applied in this particular case, and referred it back to the tribunal for further consideration.

COMMENT

Whilst the EAT did not establish whether TUPE 2006 applied on the facts of this particular case, it did express the clear view that it does apply to cross border transfers, even where the transfer is to an undertaking situated outside the EU. This means that all affected employees should be consulted in the same way as any transfer taking place within the UK.

IMMIGRATION UPDATE: New measures to prevent illegal working

New measures designed to help tackle illegal working will come into force on 29 February 2008. These include:

• a new system of civil penalties for employers who engage illegal migrant workers, with a proposed maximum penalty of up to 10,000 pounds for each illegal worker
• a new criminal offence of knowingly using illegal migrant labour, carrying a maximum two-year prison sentence and/or an unlimited fine
• the introduction of a continuing responsibility for employers to check the ongoing entitlement of migrant workers to work in the UK.

Employers may avoid incurring a civil penalty even if they have unwittingly found to have employed an illegal immigrant, if they are able to establish a "statutory excuse". In order to do so however they must undertake specific document checks prior to recruiting all employees and repeat these checks at least once every 12 months for those employees with limited leave to enter or remain in the UK.

For further information regarding the above or indeed any other UK immigration issues, please contact Mark Barnett on immigration@steeleslaw.co.uk or alternatively please telephone 020 7421 1720.

This article copyright © 2008 Steeles Law llp. All rights reserved.