SBEEA 2015 - Zero hours, Whistleblowing and more

The Small Business, Enterprise and Employment Act 2015 (SBEEA) received Royal Assent on 26 March 2015 but the large majority of its employment provisions contained in Part 11 of the Act, have not yet come into force and commencement orders are awaited. This article sets out what is in force and what to be prepared for.

In force from 26 March 2015

Employment tribunals: postponement

Section 151 of the SBEEA came into force on 26 March 2015 and is intended to address perceived problems caused by late notice and multiple postponements of hearings and the failure of a number of respondents to pay the awards made against them. Some commentators have felt that these provisions are unnecessary and that tribunals tend to refuse requests for adjournments in any event.

Section 151 amends the Employment Tribunals Act 1996 to enable the Secretary of State to pass secondary legislation to place a limit on the number of successful applications for postponements an applicant can have in a case, save in exceptional circumstances and to oblige tribunals to consider the use of cost orders where a successful late application for postponements is made at short notice before a hearing.

BIS published a Consultation on Amendments to Employment Tribunal Postponement Procedures in January 2015 which annexes the draft Employment Tribunals (Constitution and Rules of Procedure)(Amendment) Regulations 2015 which will amend the ET Rules inserting a new rule 30A that limits requests for postponements to two and provides that a postponement that is made less than seven days before a hearing will only be granted in exceptional cases. The exempted cases are where postponement is in order to facilitate settlement or where the need for a postponement is due to an act or omission by the tribunal or one of the parties. Rule 76 will be amended so as to require a tribunal to consider whether to make a costs or preparation time order against a party where a successful request for a postponement has been made less than seven days before a hearing. Further detail is expected on how these rules will operate in practice.

Equal pay: Transparency

Section 147 SBEEA requires the Secretary of State to make regulations under section 78 of the Equality Act 2010 within a year of Royal Assent to require employers with at least 250 employees to have more formal gender pay reporting arrangements, to show whether there are differences in the pay of males and females.

Voluntary gender pay reporting was introduced on a voluntary basis (the Think, Act, Report scheme) but few companies had published the required information. Labour therefore proposed an amendment to the SBEE Bill to introduce mandatory gender pay gap reporting which led to the introduction of section 147.

For more information on equal pay, see our law card Equal Pay and Terms; Key card

 

Enforcement date awaited - No Commencement Order published

Zero Hours Contracts

Following a review in 2013 the government consulted on zero hours contracts, which are contracts that do not guarantee hours of work or income. The consultation focused on the use of exclusivity clauses and the lack of transparency in zero hours arrangements. The government response was published on 25 June 2014 and there was overwhelming support for the proposal to ban exclusivity clauses in zero hours contracts. Following that consultation, the government decided to render unenforceable exclusivity terms: Section 153 of the SBEEA  will insert a new section 27A into the Employment Rights Act 1996 to prohibit clauses that prevent the employee from doing work or performing services under another contract or arrangement. In recognition of the potential ease to avoid such a restriction (eg by issuing contracts for an unrepresentative one hour par week) the SBEEA will also introduce a new section 27B into ERA 1996 to give the Secretary of State power to make regulations to ensure that zero hours workers are not restricted by any contractual provision with their employers from doing any other work. Section 27B(5) provides that these regulations may include imposing financial penalties on employers; requiring employers to pay compensation to zero hours workers; conferring jurisdiction on employment tribunals; and conferring rights on zero hours workers. Draft proposals for these regulations were published on 11 March 2015.

Zero hours contracts have proved to be a controversial area – not least politically. Whilst it is generally recognised that they can be exploitative, there can be a genuine need for irregular hours. One of the key legislative challenges for whoever forms the next government is to identify and quantify at what point such a contract is unrepresentative and becomes exploitative. Acas has promised further welcome guidance on the use of such contracts.

For more information see our law card on Zero Hours Contracts

Whistleblowing

During the passage of the Enterprise and Regulatory Reform Act 2013 the government called for evidence on whistleblowing to establish whether changes were needed to the existing statutory framework. This revealed a lack of consistency in approach taken by recipients of whistleblowing disclosures (‘prescribed persons’). Section 148 (inserting section 43FA into the ERA 1996) gives the Secretary of State a power to require prescribed persons to report annually on the whistleblowing disclosures they receive.

Further, in the light of Sir Robert Francis QC’s whistleblowing review of the NHS which stated that legal protection should be enhanced, section 149 (inserting section 49B in the ERA 1996) provides the Secretary of State with a power through regulations to prohibit defined NHS employers from discriminating against a job applicant because it appears to the NHS employer that the applicant has made a protected disclosure.

For more information see our law card on Whistleblowing

National Minimum Wage

On 27 November 2013 the Prime Minister David Cameron announced that his government were clamping down on non-payers of the national minimum wage. Section 152 SBEEA (inserting section 19A into the National Minimum Wage Act 1998, which deals with notices of underpayment) provides that the financial penalty in a notice of underpayment will be set at 100% of the arrears owed to each worker to who the notice relates, subject to a maximum of £20,000 per worker. Currently the £20000 limit applies to each notice of underpayment.

For more information see our law card on National Minimum Wage: Key Card

Public Sector Redundancy Payments

Sections 154-157 SBEEA gives HM Treasury (and the Scottish Ministers in Scotland) the power to make regulations to require certain public sector workers to repay exit payments where an individual is re-employed in the same part of the public sector after a period of less than one year. These proposals come after media coverage of large payouts to NHS and other public sector staff who then shortly afterwards returned to work in the public sector.

For more information see our law card on Redundancy In The Public Sector- Crown and Civil Servants .