Employment Law Highlights of 2016

Legislative changes etc.

Apprenticeships levy

HMRC has published draft regulations to implement the apprenticeship levy, which will require UK employers to pay 0.5% of their annual wage bills of more than £3m towards apprenticeship training. The levy will be reported and paid to HMRC through the PAYE process. The apprenticeship levy will be introduced on 6 April 2017. The levy will not affect the way employers fund training for apprentices who started an apprenticeship programme before 1 May 2017.

For a detailed note from Emplaw Online Authors Moorcrofts please click here

Gender pay gap reporting

The government has published draft regulations that will take effect in April 2017 and oblige employers of 250 or more employees in the private sector to report on their gender pay gap. Similar regulations covering public sector employers operating in England are to be published early next year, followed by guidance from ACAS and the Government Equalities Office when the regulations have been approved by Parliament.

The Regulations will require employers to publish the difference between the median and mean average hourly rate of pay paid to male and female employees; the difference between the median and mean average bonus paid to male and female employees; the proportions of male and of female employees who receive bonuses; and the relative proportions of male and female employees in each quartile pay band of the workforce.
Employers’ first gender pay reports will have to be published no later than 4 April 2018, based on hourly pay rates as at 5 April 2017 and bonuses paid between 6 April 2016 and 5 April 2017.

Tribunal fees

The challenge to tribunal fees has rumbled on. The government is still carrying out the review into the implementation of tribunal fees which is due to be published soon. In the meantime the Law Society wrote to the Ministry of Justice in September 2015 to state its view that fees were harming access to justice.

The House of Commons Justice Committee has also published a report (June 2016) on fees for court users, considering the financial and policy objectives and the impact of changes. The report recommends that the overall quantum of fees charged for bringing cases to employment tribunal should be substantially reduced.

Unison’s challenge to employment tribunal fees is due to be heard in the Supreme Court on 27/28 March 2017. Unison failed before the Court of Appeal due to lack of evidence as to the impact of fees on individual claimants.


World of work: agency workers, the gig economy etc.

The Business, Energy and Industrial Strategy Committee has launched an inquiry into the future world of work. The inquiry will focus on the rapidly changing nature of work as well as the status and rights of agency workers, the self-employed and those working in the gig economy. The terms ‘gig’ ‘sharing’ and ‘platforms’ are not synonymous:

·  'Gig' is where organisations and independent workers contract for short-term engagements

·  'Sharing' in this context means generating money by sharing or renting out assets

·  'Platform' is the use of IT systems to facilitate/connect opportunities for gig/sharing

The inquiry will also consider the definition of worker, the balance of benefits between workers and employers, flexible contracts, zero hours contracts, the role of the Low Pay Commission, minimum wage enforcement and the role of trade unions in providing representation. The deadline for responses is 19 December 2016. See also the Uber decision below.

Meanwhile an independent review of employment practices in the modern economy led by Matthew Taylor, Chief Executive of the Royal Society of Arts, has been launched. The review will consider the implications of new forms of work on worker rights and responsibilities as well as on employer freedoms and obligations.

The review ties in with the November 2016 Green Paper on reforming corporate governance, in light of the government’s stated aim of creating an economy that ‘works for all’.

Separately, the Work and Pensions Committee has launched an inquiry to consider whether the UK welfare system adequately supports the growing numbers of self-employed and gig economy workers and how it might be adapted to suit their needs.

And the Office of Tax Simplification has published a focus paper on the gig economy and tax. The OTS notes that tax issues are raised by gig working (and to an extent by sharing) in a number of ways especially as a person’s status for tax and for employment rights are not always the same.

Trade Union Act 2016

The Trade Union Act 2016 makes a number of amendments to the Trade Union and Labour Relations (Consolidation) Act 1992: principally setting out requirements for minimum ballot requirements; information requirements relating to industrial action; arrangements for the timing and duration of industrial action; requirements for the supervision of picketing; powers in respect of paid time off for trade union duties and activities in the public sector; restricting the deduction of union subscriptions form wages. It also introduces a provision which requires the Secretary of State to commission an independent review into industrial action. The Act will need to be brought into force by regulations which have not yet been published. Draft regulations have been published defining ‘important public services’ which are stated to come into effect from 1 March 2017.

Separately a revised Code on Picketing has been published which suggests that guidance on the use of social media is still planned.

Modern Slavery

Section 54 of the Modern Slavery Act 2015 requires certain large organisations to develop a slavery and human trafficking statement each year. The statement should set out what steps organisations have taken to ensure modern slavery is not taking place in their business or supply chains. The Home Office has published guidance on the statement. The requirement to provide a statement applies in respect of financial years ending on or after 31 March 2016.

For solicitors, the Law Society has published specific guidance on compliance with section 54.

The Modern Slavery (Transparency in Supply Chains) Bill 2016 has had its third reading in the House of Lords. The Bill requires contracting authorities to exclude from the procurement procedures economic operators who have not provided a statement on slavery and human trafficking

National living wage


The National Minimum Wage (Amendment) Regulations 2015 brought into force the National Living Wage on 1 April 2016. The NLW is an obligatory minimum wage payable to workers over the age of 25, initially set at £7.20. The NLW has been somewhat controversial with some employers rethinking overall remuneration packages to balance out the additional cost.

Caste discrimination

The government announced that it is to undertake a full public consultation on the issue of caste and the Equality Act 2010. A key aim of the consultation will be to obtain the views of the public on whether additional measures are needed to ensure victims of caste discrimination have appropriate legal protection and effective remedies under the 2010 Equality Act. 

Case law

Uber drivers are workers

In Aslam and others v Uber, an employment tribunal held that Uber drivers were workers for the purposes of the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998. The ET found that the contractual documentation between Uber and the drivers indicated that the reality of the relationship was that of worker status. Uber is appealing.

Sexual orientation: gay cake decision

The Court of Appeal in Northern Ireland has upheld a county court’s decision that a Christian bakery that turned down a gay man’s request to bake a cake celebrating gay marriage constituted discrimination on the grounds of sexual orientation (Lee v McArthur and Ashers Baking Company Limited).

Holiday pay includes commission

In Lock v British Gas Trading Ltd the Court of Appeal upheld the EAT’s decision that holiday pay should include commission and that the Working Time Regulations should be interpreted in such a way as to give effect to the Working Time Directive. British Gas has asked for leave to appeal to the Supreme Court.

Immigration status was not race discrimination

The Supreme Court in Taiwo v Olaigbe and another; Onu v Akwiwu and another has held that vulnerable migrant workers who were badly mistreated by their employer were not discriminated against, directly or indirectly, because of their race. Whilst immigration status is a function of nationality it is not part of it. The workers were treated badly because of their vulnerability (which arose from their immigration status) but not because of their race or nationality.

Whistleblowing: Nurmohamed appeal

The Court of Appeal was due to hear the whistleblowing ‘public interest’ appeal in Chesterton Global v Nurmohamed  on 11/12 October 2016. Unfortunately this case was bounced from the court list due to lack of court time and is expected to be relisted for hearing in early 2017.

Disclosures made on or after 25 June 2013 must satisfy the test of being ‘in the public interest’. In Nurmohamed, the EAT ruled that such a disclosure need not be in the interest of the wider public and a relatively small group would suffice. Nurmohamed was followed by Underwood v Wincanton plc [2015] in which the EAT ruled that a dispute between an employer and four employees over contractual terms could be a protected disclosure. In Morgan v Royal Mencap Society [2016], the EAT held that a complaint about an employee’s cramped working conditions could potentially be a protected disclosure. Further guidance on ‘in the public interest’ will therefore be welcomed.

Whistleblowing and knowledge

In Royal Mail Group Limited v Jhuti the EAT found that Ms Jhuti had been automatically unfairly dismissed on grounds of making a protected disclosure even though the decision maker had not known of the disclosure. However the decision maker had been given information (on which she made the decision to dismiss) which had been manipulated by Ms Jhuti’s manager, to whom the disclosures had been made.

Reasonable adjustment can be pay protection

In G4S Cash Solutions Ltd v Powell the EAT held that maintaining a disabled employee’s pay at his previous rate while he undertook a lesser responsibility job was a reasonable adjustment which the employer had to make.

Revoked dismissal bars unfair dismissal claim

In Folkestone Nursing Home Ltd v Patel, Mr Patel was dismissed for sleeping on duty and falsifying records. The company’s disciplinary procedure was incorporated into Mr Patel’s contract of employment. Mr Patel was dismissed and he appealed. The dismissal was revoked but Mr Patel refused to accept this, stating that he was dissatisfied with the reasoning, and instead brought unfair dismissal proceedings.

The EAT found that Mr Patel had not been dismissed: reinstatement was inherent in the provision of a right of appeal if the appeal was successful unless the contract/ handbook expressly provided otherwise.


Media reporting on the government’s stance on Brexit has variously given cause for concern and comfort. Emily Thornberry, shadow foreign secretary, and Keir Starmer, shadow Brexit secretary, wrote to David Davis in advance of the Opposition Day debate demanding that Parliament should be given a vote on the government’s Brexit plan before Article 50 is triggered. Labour also published a list of 170 Brexit questions covering a range of subjects.

The Prime Minister has announced that the UK will begin the formal Brexit negotiation process by the end of March 2017 and the next Queen’s Speech will include a Great Repeal Bill. The timing on triggering Article 50 means that the UK is likely to leave the EU by summer 2019. The government has intimated that MPs will be able to vote on the terms of the Brexit deal that is negotiated with the other 27 member states.


Meanwhile, the High Court ruled on 3 November in Miller v Secretary of State for Exiting the European Union that the government did not have the power to trigger Article 50 to withdraw from the EU. The High Court held that royal prerogative may not be used to nullify rights that parliament has enacted through primary legislation. In other words, only the UK parliament may trigger Article 50. The government is appealing the decision to the Supreme Court and the case is scheduled for hearing in December, with judgment due in early January 2017.

Labour’s 170 questions to the government can be read here:


A House of Commons briefing paper on the employment law implications of Brexit can be read here: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7732

At present, the Government has confirmed the following as regards post-Brexit EU employment law:

  •  the Prime Minister has confirmed that workers’ existing legal rights will be guaranteed during her period in office
  • the ‘Great Repeal Bill’ will convert all current EU employment law into domestic law, whatever future relationship the UK has with the EU (the House of Commons Library has published a briefing paper on Legislating for Brexit: the Great Repeal Bill)
  •  the direct effect of relevant EU rights will persist post-Brexit
  • judgments of the European Court of Justice will be given effect in domestic law at the point of exit