Emplaw Monthly - End of Summer 2016
New from Emplaw Online
Members of the Employment Lawyers Association (ELA) may be interested to read an article by Emplaw's Legal Content Director entitled Toughening up on Immigration: What You Should Know. The article includes an up to date review of the key legislation which employment specialists need to understand. It is published in the August 2016 edition of the hard copy magazine and online.
An incisive article by Emplaw Online authors, Gowling WLG. It follows the introduction of the Pensions Regulator's new Code of Practice on money purchase benefits and accompanying Guides which came into force on 28 July 2016. These apply to all money purchase benefits in occupational pension schemes, including Additional Voluntary Contributions in otherwise defined benefit schemes.
Focus On Emplaw Online content
As the government announces planned changes to the taxation of termination payments (see News below) take a look at our guide to Tax - Post Termination Issues drafted by Chartered Accountants and Chartered tax Advisors, Nunn Hayward which includes details of the current scheme as well as the upcoming changes. See too the other guides in our section on Settlement of Disputes.
As the Immigration Act 2016 rolls out, our reference law cards which summarise and track the coming into force of the latest Acts are a useful resource. They are listed at https://www.emplaw.co.uk/statutes-and-regulations
Full content is available to subscribers only.
Government Response to Consultation: termination payments
The government has confirmed in a response to consultation that it will retain the £30,000 tax free exemption on termination payments although from April 2018 certain payments will no longer fall within the allowance. The key proposals are that from April 2018, contractual and discretionary payments in lieu of notice will be treated as taxable earnings and subject to tax and NICs. From April 2018, therefore, it will be irrelevant whether a payment made in lieu of notice is contractual or discretionary: such payments will always be subject to deductions for tax and NICs.
Other post-employment payments which would have been subject to tax/NICs if an employee had worked his notice will also be treated as taxable earnings (so an employee cannot argue that they are damages for breach of contract). Payments over £30,000 will be subject to employer's NICs. Subject to this, non-contractual termination payments will be tax- and NICs-exempt up to £30,000.
Consultation on salary sacrifice
The government has published a consultation on salary sacrifice for the provision of benefits-in-kind. In the 2016 Budget the government announced that it will consider limiting the range of benefits in kind that attract income tax and national insurance contributions advantages when provided as part of salary sacrifice arrangements.
The purpose of the consultation is to explore potential impacts on employers and employees should the government decide to change the way the benefits code applies when a benefit in kind is provided in conjunction with a salary sacrifice or flexible benefit scheme. Changes will take effect from April 2017.
Appeals direct from EAT to Supreme Court
Article 3 of the Criminal Justice and Courts Act 2015 (Commencement No. 4 and Transitional Provisions) Order 2016 brings into force certain of the provisions of the Act relating to appeals and judicial review on 8th August 2016. Article 3(a) and (b) commences sections 64 and 65 which make provision for appeals from the Upper Tribunal and the Employment Appeal Tribunal respectively to the Supreme Court if certain conditions are met.
ICO guide on data security
The Information Commissioner’s Office has published a practical guide for small companies on data security, which emphasises the importance of employees as a first line of defence against breaches. The guide notes that keeping IT systems safe requires time, resource and specialist knowledge and that employers should take appropriate measures to secure personal data. The guidance provides practical technical advice on internet security but also highlights the measures employers should take to ensure staff understand and observe proper procedures to ensure data security.
EU/US Privacy Shield guide
The EU/US Privacy Shield went fully operational on 12 August 2016. Companies can now sign up to the Privacy Shield with the US Department of Commerce who will then verify that their privacy policies comply with the high data protection standards required by the Privacy Shield. The European Commission has also published a guide for citizens explaining how individuals’ data protection rights are guaranteed under the Privacy Shield and what remedies are available for individuals if they consider their data has been misused and their data protection rights have not been respected.
Gender Pay Gap reporting: s. 78 Equality Act 2010 in force
The Equality Act 2010 (Commencement Order no. 11) Order 2016 has brought section 78 Equality Act 2010 into force from 22 August 2016. Section 78 confers a power to make regulations requiring certain employers to publish information relating to the pay of employees for the purpose of showing whether there are differences in the pay of male and female employees. A consultation paper on the draft Equality Act 2010 (Gender Pay Gap) Regulations 2016 was published in February 2016 containing the draft regulations (https://www.gov.uk/government/consultations/mandatory-gender-pay-gap-reporting) and the final regulations are expected shortly. The consultation raised numerous practical issues and it is hoped that government guidance will be published with or shortly after the draft regulations to provide more clarity.
Separately the government has published consultation (Mandatory Gender Pay Gap Reporting – Public Sector Employees) on extending the gender pay gap reporting obligations to the public sector. Consultation will run until 30 September 2016.
Public Concern at Work 5 year review
The whistleblowing charity, Public Concern at Work, has published a review of the charity’s activities over the past five years highlighting the ongoing difficulties experienced by whistleblowers and noting that:
- Four out of five whistleblowers experience negative final outcomes
- Seeking advice at an early stage is the most effective action a whistleblower can take (although 70% of whistleblowers seek advice after they have blown the whistle)
- A small continuous drop in the number of individuals who say they would raise a concern about serious malpractice
- A call to government to improve the practice of organisations by placing PCaW’s Code of Practice on a statutory footing
Code of practice on English language requirement for public sector workers
Part 7 of the Immigration Act 2016 (Act) requires public authorities to ensure that public sector workers in customer facing roles speak fluent English and that public authorities comply with a Code of Practice. For appropriate public authorities in Wales, this duty requires fluency in English and/or Welsh. A final Code of Practice was published in July in which it is stated that it is the Governments' intention to bring Part 7 (which sets out the language requirements) into force in autumn 2016.
Civil Courts Structure Review: Final Report and recommendations: employment tribunals and EAT
Briggs LJ's Civil Courts Structure Review: Final Report was published in July. The wide ranging review endorses the creation of the Online Court and recommends there should be a single court as the default court for the enforcement of the judgments and orders of all the civil courts (including the new Online Court). The Report states that there continues to be a case for convergence between the Employment Tribunal and Employment Appeal Tribunal with the civil courts and discusses proposals for an Employment and Equalities Court, as a civil court with specialist judiciary but concludes that the detail is a matter beyond the scope of this review.
New employment minister announced
On 28th July Margot James MP was appointed Minister for Small Business, Consumers and Corporate Responsibility with responsibilities including trade unions, employment law and the national minimum wage. Her positon sits within the new Department for Business, Energy and Industrial Strategy (BEIS)
Extended definition of ‘worker’ status for whistleblowing claim depends on whether end user determines terms of work
The statutory protection available to whistleblowers applies to a worker who makes a protected disclosure within the meaning of Part IVA ERA 1996. Section 43K provides an extended meaning of ‘worker’ for these purposes:
“(1) For the purposes of this Part “worker” includes an individual who is not a worker as defined by section 230(3) but who-