Emplaw Monthly - December 2016
Gender Pay Gap Regulations 2017
The long-awaited Gender Pay Gap Regulations have finally been published. They are presently in draft form, awaiting parliamentary approval when ACAS and GEO guidance will be published. The regulations will take effect in April 2017 and oblige larger employers 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. Employers’ first gender pay reports will have to be published no later than 4 April 2018.
Taylor review on modern employment practices
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’.
Meanwhile the BEIS inquiry into the Future World of Work continues (reported in in October’s Emplaw Monthly) and the deadline for submissions is 19th December.
With 15% of those working in the UK’s labour market now termed self-employed, there has been a rise in the number of people doing ‘gig’ work – short term, casual work that is increasingly sought by people through mobile phone apps when they want to work.
OTS papers on the gig economy
The Office of Tax Simplification has contributed to the debate on the gig economy with a summary paper and focus paper. The focus paper raises some of the tax issues and implications that arise from the gig economy.
The report underlines that the terms ‘gig’ ‘sharing’ and ‘platform’ are not synonymous; in short:
· '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 OTS considers that tax issues are raised by gig working (and to an extent by sharing) in a number of ways, especially as status for tax and for employment rights are not always the same:
· the individual worker who contracts for a gig: are they employed or self-employed for tax purposes? How do they interact with the tax system? Is the system simple for them?
· the platform operator: could they become more involved beyond simply sorting out their own tax position?
· the individual or company who is offering the gig: does the hirer have any role?
· HMRC: the tax system has existing rules, systems to gather data and ways of assessing that will apply to those working in the Gig and Sharing Economies, just as to the generality of taxpayers. But what of the practicalities? What about knowing who the individuals are in the first place and then managing the increased monitoring load?
· the Exchequer: does gig working mean lower tax receipts, particularly of employer NICs.
Trade Union Act: ‘important public service’ regulations 2017
The 1992 Act sets out Britain’s industrial relations framework. The Trade Union Act 2016 amends the 1992 Act and introduces two new voting thresholds in respect of industrial action ballots. Section 226(2)(a)(iia) introduces a turnout threshold. It requires that in all ballots for industrial action, at least 50% of the trade union members entitled to vote must do so in order for the ballot to be valid.
Section 226(2B) of the 1992 Act sets out a 40% threshold of support that must be satisfied in ballots for industrial action in important public services. Section 226(2D) gives the Secretary of State the power to specify which services are in scope by statutory instrument before the provision can come into force.
Under section 226(2E) the 40% threshold may only apply to ballots for industrial action in important public services in the fire, health, education, transport, border security and nuclear decommissioning sectors.
This instrument sets out for the first time which important public services in the health, education, fire, transport and border security sectors will be specified in relation to the 40% threshold. These draft regulations are due to come into effect from 1 March 2017 or, if later, 21 days after the date on which the regulations are made.
Finance Bill 2017: draft legislation
HMRC has published draft provisions for the Finance Bill 2017 for consultation, including consultation documents, responses, draft regulations and supporting materials. The closing date for comments is 1 February 2017. In outline the key changes for employment purposes are:·
Reform of the tax and NICs treatment of termination payments. The government will legislate in the Finance Bill 2017 to tighten and clarify the tax treatment of termination payments. The measure will take effect from 6 April 2018. This includes:
- making all contractual and non-contractual payments in lieu of notice (PILONs) taxable as earnings
- requiring employers to tax the equivalent of an employee’s basic pay if notice is not worked
- removing foreign service relief for employees who have spent time working outside of the UK
Legislation will also be introduced in the NICs Bill 2017 to align the tax and employer NICs treatment of termination payments so that employer NICs will be payable on the elements of the termination payment exceeding £30,000 on which Income Tax is due. The first £30,000 of a termination payment will remain exempt from Income Tax and National Insurance.
· The government will raise the Income Tax Personal Allowance to £12,500 and the higher rate threshold to £50,000. Next year the Personal Allowance will rise to £11,500 and the higher rate threshold to £45,000
· The government will legislate in Finance Bill 2017 to remove the requirement for tax to be deducted at source from interest distributions of open-ended investment companies, authorised unit trusts and investment trust companies
· The government will align the secondary (employer) threshold with the primary (employee) threshold for National Insurance Contributions. From April 2017 both employers and employees will start paying NICs on weekly earnings above £157
· The government will legislate to abolish Class 2 NICs from April 2018
· The government will legislate to simplify the process for applying for and agreeing PAYE settlement agreements
· Legal support: the government will legislate to ensure that all employees or former employees called to give evidence, for example, at an inquiry, will be able to receive legal support funded by their employer tax-free
There are other tax changes to employer-provided pensions advice, salary sacrifice, company cars, benefits in kind, assets made available to employees, employee business expenses, off payroll working in the public sector, employee shareholder status.
Illegal Working Compliance Orders Regulations 2016
The purpose of the Illegal Working Compliance Orders Regulations 2016 is to enable courts to impose easily right to work checks or to require the production of right to work documentation as part of an illegal working compliance order. Rather than set out the detail of the checks or documents in the court order itself, courts will be able to impose the checks and require the production of documentation simply by referring to the regulations.
These regulations are made as part of the implementation of the measures in the Immigration Act 2016, specifically illegal working compliance orders.
Fit for Work guide
The Department for Work and Pensions has uypdated its Fit for Work guide for general practitioners.
The Code of Practice (English Language Requirements for Public Sector Workers) Regulations 2016
The Code of Practice (English Language Requirements for Public Sector Workers) Regulations 2016 have been published and will come into force on 22nd December 2016.
Under section 77(1) of the Immigration Act 2016 (c.19) a public authority must ensure that each person who works for the public authority in a customer-facing role speaks fluent English. Under section 77(2) of that Act in determining how to comply with this duty a public authority must have regard to the code of practice issued under section 80(1) of that Act that is for the time being applicable to that authority.
These Regulations bring into force the code of practice issued under section 80 of that Act. The purpose of the code is to set out guidance for public authorities in relation to Part 7 of that Act.
Benefit and pension rates announced 2017/18
The proposed benefit and pension rates for 2017/18 have been announced.
SSP will increase to £89.35
Statutory maternity pay, statutory paternity pay, shared parental leave and statutory adoption pay will increase to £140.98
Statement of changes in the Immigration Rules
A number of changes have been made to the Immigration Rules, including an increase in the Tier 2 salary threshold to £25,000 and increase in Tier 2 salary threshold for short term staff to £30,000. The immigration skills surcharge of £1,000 a year per sponsored employee is expected to come into force in April 2017.
Reforming the Employment Tribunal and EAT system: consultation
The Department for Business, Energy & Industrial Strategy has published a consultation paper seeking views on issues to be considered in implementing wider justice system reform principles in the Employment Tribunal system.
The aim of the programme of reform is to transform the way tribunal users engage with the system and to enable citizens to present their own cases more easily and to obtain justice more swiftly. It will try to reduce complexity in language, process and systems and reduce the costs of the tribunal system to taxpayers.
Temporary incapacity can be a disability
Mr Daouidi worked as a kitchen assistant in a hotel owned by Bootes Plus, initially on the basis of a contract of occasional employment and thereafter on a full time employment contract. Shortly afterwards he slipped on the kitchen floor and dislocated his left elbow. He commenced the procedure to have his temporary incapacity for work recognised. Whilst he was still unable to work, he received notice of disciplinary dismissal from Bootes Plus.
ECJ rules that bank nurses are workers
The ECJ has followed the Advocate General’s opinion that bank nurses who were members of a not-for-profit organisation and who did not have a contract of employment should be considered to be workers for the purposes of the Temporary Agency Workers Directive 2008/104/EC.