The Employment Appeal Tribunal (2010) recently held in the case of Bateman v Asda Stores (2010) that employers who reserve a right to vary its employees terms and conditions of employment in accordance with its business requirements, including pay, even where it is only contained in the company handbook, can unilaterally vary its employees contractual rights so long as the changes are instigated correctly.

New compensation rates will apply from the 1st February 2010 to unfair dismissal cases. Compensation in unfair dismissal cases is made up of a basic award and a compensatory award (the latter compensating victims of unfair dismissal for the financial loss arising out of their dismissal).

The basic award is calculated according to a formula based upon age, length of service, and average gross weekly pay. The figure for average weekly pay will continue to be capped at £380 per week maximum from the 1st February 2010 and only the most recent 20 years will be taken into account in terms of length of service. The basic award is calculated in detail as follows:-

• Years of service below 22 years of age, the weekly pay is multiplied by 0.5

• Years of service between age 22 and 41, the weekly pay is multiplied by 1

• Years of service from age 41 onwards, the weekly pay is multiplied by 1.5.

Accordingly, the maximum basic award is 20 years at £380 x 1.5 = £11,400.00.

Where an employee is dismissed for a reason connected with their role and they were an employee representative, an occupational pension trustee, a trade union member or representative, or a safety representative (or were in the process of becoming a safety representative), then the absolutely minimum basic award will continue to be £4,700.00 from the 1st February 2010 (although this may be reduced in certain circumstances).

The maximum compensatory award from the 1st February 2010 will be reduced to £65,300.00 from £66,200.00.

The basic and compensatory awards when combined will therefore produce an overall maximum award of £76,700.00 from the 1st February 2010. This is a reduction from the previous maximum of £77,600.00. The fall has been brought about by the reduction in the compensatory award which has been reduced on account of the fall in inflation during 2009.

The House of Lords recently held in Stringer v HMRC (2009) that employees on sick leave are entitled to accrued holiday pay and can carry over their holiday entitlement to following years if they are too ill to take it (or if their employment terminates without having had the opportunity to take it, they are entitled to be paid in lieu instead). This decision follows a ruling in January 2009 by the European Court of Justice (ECJ) which confirmed that employees are entitled to accrued holiday pay throughout the entire period they are off sick. Nevertheless, under the Working Time Regulations 1998, employees were obliged to either take there annual holiday leave within 12 months or lose it, and the regulations effectively limited claims for unlawful deductions from wages to the 3 previous months worth of deductions from the point of bringing a Tribunal claim. Hence, following the ECJ decision in Stringer, there was a clash with the Working Time Regulations which the House of Lords has now deliberated upon. The House of Lords confirmed that the ECJ’s decision superseded the Working Time Regulations. Consequently, claims for unlawful deductions of wages are now no longer limited to just the previous 3 months worth of unlawful deductions. Instead, employees can now claim for all unlawful deductions that have been made by their employer that form part of a series of deductions, so long as they commence Tribunal proceedings within 3 months of the final (and therefore most recent) deduction being made.