Policy News Journal - 2014-15

Deductions from Salary

30 September 2014

Is recovery of a previous overpayment of wages or salary a 'deduction' which must be explained in an itemised pay statement?

Thanks to Daniel Barnett for sharing Naomi Cunningham’s summary of the Employment Appeals Tribunal (EAT) decision in Ridge v HM Land Registry.

Mr Ridge had exhausted his contractual sick pay, and was continuing to take intermittent periods of sick leave. That meant his entitlement to pay varied month by month depending on how many days he had worked. Some months his employer’s payroll administration knew how many days he had worked by payday, and paid him the appropriate amount. But sometimes they didn’t, with the result that he was overpaid one month, and then a deduction was made the following month to recover the overpayment.

The EAT held that those deductions were, er, deductions.

The EAT sometimes makes surprising decisions. This was not one of them.

Employers face increased pension loss payouts after NHS case

3 October 2014

Employers may be liable to pay increased compensation relating to pension loss to employees dismissed unfairly, lawyers have warned, after a tribunal appeal found an earlier decision had miscalculated the sum owed to an NHS scheme member.

We are grateful to Pensions Expert for bringing us this report:

The employee brought the claim against Plymouth Hospital NHS Trust on the grounds of constructive unfair dismissal and disability discrimination, and was awarded £105,643 for past and future loss of earnings, and future pension losses. However, on appeal, the judge ruled the 'substantial loss' rather than the simplified approach should be used for calculating the future pension losses of the claimant, who was a member of a final salary scheme. The substantial loss approach will generally produce the higher award since it assumes whole-career loss. Whereas the simplified approach calculates pension loss by adding together the loss of enhancement to pension rights, loss of employer contributions to the hearing date and the loss of future employer contributions. The employee's award was increased to £166,595. Plymouth Hospital NHS Trust said it was unable to comment as the case is ongoing. According to the Compensation for Loss of Pension Rights guidance, released by chair of employment tribunals and the government actuary, the substantial loss approach may be chosen "in cases where the person dismissed has been in the respondent's employment for a considerable time, where the employment was of a stable nature and unlikely to be affected by the economic cycle and where the person dismissed has reached an age where he is less likely to be looking for new pastures". The tribunal found due to the highly specialist nature of the employee’s job – as a clinical hospital technician – they would have remained with the employer, and therefore been an active member of the scheme, until retirement.

CIPP Policy News Journal

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