The recent employment tribunal case of Kinnear v Marley Eternit Ltd highlights the potential financial risks of dismissing an apprentice before he/she completes their apprenticeship.

Mr Kinnear had entered into a 4-year, fixed-term apprenticeship with his employer, which was due to expire in November 2018, upon completion of his qualification as a Roofer.  However, Mr Kinnear was made redundant in June 2016 due to a downturn in work.

Mr Kinnear was awarded £25,000 in respect of damages (the maximum amount an Employment Tribunal can award for a breach of contract claim).  This was given on the basis that the Employment Judge found Mr Kinnear would be unlikely to be able to finish his apprenticeship with another firm because of his age and, as such, his future losses were likely to stretch over some years.  Consequently, he would be disadvantaged in the labour market going forward, by not having attained his qualification in his chosen trade.

Employers should note that training is the primary purpose of a contract of apprenticeship, while doing work for the employer is secondary.  As such, apprentices employed under a contract of apprenticeship have enhanced rights on termination of their employment compared to ‘ordinary’ employees, and employers owe them greater obligations.  Moreover, an employer has significantly less scope for dismissing an apprentice employed under a contract of apprenticeship than an ‘ordinary’ employee.  Accordingly, if a business finds itself experiencing a downturn in trade, it will require to demonstrate that it has taken all reasonable steps to find alternative placements for the apprentices who are at risk, as redundancy really should be a last resort, given the risks involved.  Furthermore, if the apprentices have more than 2 years’ service they will be eligible to bring claims for unfair dismissal as well as damages claims for breach of contract.

Any member companies who employ apprentices and are entering a redundancy situation should contact Scottish Engineering for advice.



Holiday Pay Update. 

British Gas has been refused leave to appeal to the Supreme Court in Lock -v- British Gas Trading.  In Autumn 2016, the Court of Appeal held in the Lock case that employees whose wages include an element of commission can no longer be paid less when they are on annual leave.  As such, the amount employees get for their holiday pay must be based on both their basic pay and any commission they are normally entitled to.

The case will now go back to the Employment Tribunal, in order to determine whether Mr Lock was underpaid and, if so, what the appropriate period for the calculation should be.

Therefore, any employers who currently operate a commission-based structure will require to include this in holiday calculations going forward, to ensure they comply with their legal obligations.

Any member companies impacted by this decision should contact Scottish Engineering for advice.



New limits for unfair dismissal awards, redundancy payments and guarantee payment.

The increases will come into effect on 6th April 2017:

  • The maximum amount of “a week’s pay” for the purpose of calculating a redundancy payment or for various awards including the basic or additional award of compensation for unfair dismissal will increase from £479 to £489
  • Limit on amount of compensatory award for unfair dismissal will increase from £78,962 to £80,541
  • Limit on amount of guarantee payment payable to an employee in respect of any day will increase from £26 to £27



ACAS has now published guidance on gender pay gap reporting for private and voluntary sector companies in advance of the snapshot date (5 April).  There are also guidance and fact sheets available for employers which can be accessed at:

The Government have also advised that public sector employers will be required to report on their gender pay gaps in similar fashion from 31 march 2017.  Draft regulations governing the public sector have been issued recently.



Keeping Up Appearances

A parliamentary report has concluded that sexist dress codes are still prevalent within the workplace and has called for a review of the Equality Act 2010, which governs discrimination law in the UK.  Two Parliamentary Committees heard evidence from hundreds of women who had been forced to wear heels (often to the detriment of their health), dye their hair blonde, wear revealing outfits and constantly reapply make-up whilst at work. 

The issue of dress codes hit the headlines last year after a female worker reported that she had been sent home, without pay, for refusing to comply with a company dress policy which specified that females must wear two to four inch heels.  Her male colleagues were not required to wear similar footwear.  The female in question set up an online petition on the government’s website which attracted over 100,000 signatures and prompted the parliamentary enquiry into the issue. 

It is not uncommon for employers to impose dress codes or appearance requirements on staff because they want to present a professional image or due to health and safety requirements.  However, it was highlighted by MPs in the report that gender specific dress codes reinforce stereotypes which could make lesbian, gay, bi-sexual and transgender workers feel uncomfortable at work and led to discrimination claims being pursued.

 It remains to be seen whether this report will lead to changes in the law.  However, it is a reminder that employers should think carefully about the content of any dress codes that they seek to enforce and identify the reason why they believe the code is necessary to the employee’s role.  Employers should also consider consulting the ACAS and the EHRC guidance on dress codes and ensure that any requirements that are put in place are applied even-handedly between men and women. 


Beware of the Christmas party!

In a personal injury claim brought by an employee against his employer in respect of a violent assault upon him by the Company’s Managing Director, it was held that the Company was not liable for the injury in the circumstances of this case.  The Company had held a Christmas party at an organised venue but a number of employees, including the employee assaulted, and the Managing Director continued to have a drinking session straight after the Christmas party at a separate venue.

It was held by the High Court in England that neither the fact the Company was expected to pay for some or all of the drinks, nor the fact that the attack was triggered by a work-related discussion, during which the Managing Director felt that his authority was being challenged by the other employee, was sufficient to outweigh the fact that the incident had arisen in the context of voluntary and personal choices by those present to continue with a heavy drinking session which was entirely separate from the official Christmas event.  However, if this had happened at the official event the Company probably would have been liable for the assault, on the basis of vicarious liability.

Holiday Pay Update

The latest Court of Appeal judgment in the case of Lock v British Gas Trading Ltd has confirmed that employers will require to include result-based commission payments when calculating holiday pay.

In summary, Mr Lock was a salesman who received a basic salary with variable commission, which was paid in arrears. Mr Lock was unable to earn commission whilst on holiday, and therefore argued that he was economically disadvantaged as a result of taking annual leave. It was confirmed by the European Court of Justice (ECJ) in 2014 that holiday pay should be paid by reference to commission payments that the worker would have earned if at work.

The question for the Court of Appeal to determine was whether the UK holiday pay legislative provisions could be read in a way which was compatible with the ECJ ruling, which it did. However, unhelpfully no guidance was given by the Court of Appeal in relation to the method employers should utilise when calculating how commission payment should be reflected in holiday pay. This case will clearly have significant implications for member companies that utilise commission based structures in their operations.

British Gas has a further right of appeal to the Supreme Court, and therefore there may yet be another chapter to be written in this long running saga.

An appeal is also set to be heard by the EAT in December 2016 in respect of the Fulton v Bear Scotland litigation, which raises a challenge to the “three-month gap” rule. This “rule” significantly limits the prospect of large back pay claims being establishing by employees as these historic claims cannot succeed if there has been a gap of three months or more between holiday underpayments.

Any further legal updates on holiday pay will be reported in our members’ briefing and blog.

Modern Apprenticeships for SMEs – Skills Development Scotland


Thousands of small businesses in Scotland employ Modern Apprentices. 

Here’s why you should join them:

  • It’s cost effective – we contribute towards training costs
  • Three quarters of employers say apprentices improved their productivity
  • Training through work means your apprentices really understand your business – and your customers

How we can help:

You want to invest your time on developing your business.  So, our Employer Engagement Team is here to help – and it won’t cost you a penny.

You’ll get one-to-one support, tailored to your business needs.  We’ll offer practical advice to help you get started with Modern Apprenticeships, and we’ll point you to any additional funding opportunities relevant to you.

Click on the link below, fill in the form and someone from SDS will be in touch.

Apprenticeship Levy

The apprenticeship levy is due to come into force in April 2017 and will require the employers with a payroll bill of more than £3m pay 0.5% of this to HMRC on a monthly basis. There are no exceptions to this for employers who currently pay a levy to CITB or ECITB.

In England and Wales, details of how this will work in practice are already at an advanced stage. This will allow employers who employ apprentices to use the apprenticeship levy funds they pay plus a 10% Government incentive payment for the training of apprentices within defined parameters, via digital accounts.

In Scotland there is not as yet, any detail as to how employers will be able to claim back and use the money paid by way of the apprenticeship levy. The Scottish Government commenced a consultation with employers on 13 July 2016. The outcome of the consultation is not expected until the autumn, around the time of the Scottish Government’s spending review decisions.

Scottish Engineering will update members as more information becomes available.

Reasonable Adjustments

Following the judgment of the Employment Appeal Tribunal in the case of G4S Cash Solutions (UK) Ltd -v- Powell it may be necessary for employers to consider pay protection where an employee is offered alternative employment as a reasonable adjustment. The Employment Appeal Tribunal found that the objectives of the legislation concerning reasonable adjustments may clearly necessitate an element of cost to the employer and pay protection was but one form of cost to an employer. However, the question will always be whether the adjustment is reasonable or not. If the adjustment is reasonable the employer is required to make it.

However, there were particular circumstances in this case including that the employee had continued to receive the enhanced rate of pay for almost a year and had expected it would be a long term arrangement, and the employer’s main reason for wanting to discontinue paying at the higher rate was because of discontent it would create amongst other employees employed in the same role, as opposed to any particular financial reason.

The Employment Appeal Tribunal also stated they did not expect it would be an everyday event that an employer would be required to make up an employee’s pay long term to any significant extent.

However, if an employer is now offering a lower paid role to a disabled employee as a reasonable adjustment, it would appear that the company will now need to demonstrate that pay protection is something it has taken into consideration, and if it is not in a position to pay the higher salary, then there will need to be fairly robust reasons for this.