Emplaw Monthly - End of February 2018
New at Emplaw Online
Government Response to the Taylor Review: Good Work?
An excellent article from Emplaw Online authors Gowling WLG with an incisive summary of what the plan covers and its potential impact, as well as what has been ruled out.
Click here for the article
Invitation to free seminar:Employment Law Update – Is Your Business Up To Speed?
An invite from Emplaw contributors Moorcrofts to a free seminar providing a general employment law update looking at the impact of recent cases and employment changes as well as looking ahead to what is coming up that will have an impact for employers. With GDPR, gender pay gap reporting and the Government’s plans to implement the Taylor “Good Work” report just a few of the topics that they will be covering, there should be lots to discuss.
The seminar, which is suitable for HR professionals, senior managers and business owners takes place near Marlow in the Thames Valley on 14th March 9-11:30am. For more information and to register, please click here
GDPR and Pensions
Getting ready for the GDPR- essential guides on the legal issues and practical steps that everyone involved in pensions will need to think about. An article from Gowling WLG who author Emplaw Online's content on Pensions.
Employment law news
Government published response to Taylor review: what's happened since and what will happen next?
Last year the Taylor review considered how employment law and practices needed updating to keep up with modern business models. The government has now published its response to the review.
There are few immediate changes. The government has instead published four consultations on aspects of the Taylor review’s recommendations relating to enforcing employment rights, protecting agency workers, defining employment status and increasing transparency. The government has confirmed that changes to tax and national insurance have not yet been included. The consultation enforcing employment rights asks 64 questions and interestingly is a joint review from HM Treasury, HM Revenue & Customs, and Department for Business, Energy & Industrial Strategy. The closing date for responses is 1st June
The government proposals include the following:
· Written statements and payslips – the proposal is to extend the right to a written statement of terms and itemised pay statement to workers-
· Holiday pay reference period – the proposal is to increase the holiday pay reference period to 52 weeks (from 12 weeks)
· Agency workers – the government has suggested that agency workers should receive a clear breakdown of who pays them and any costs or charges deducted from their wages
· Right to request contract change – the government proposes introducing a right for all employees and workers to request a change to a more stable contract
· Amending the law on calculating continuity of service
· Enforcing vulnerable workers’ holiday and sick pay rights
· Action re unpaid interns to ensure that they are not in reality workers
For more detail see the excellent article here from Emplaw Online authors Gowling WLG with an incisive summary of what the plan covers and its potential impact,
What has happened since?
Itemised pay statements for workers from 6th April 2019
An Order has already been laid before parliament to confer the right to an itemised pay statement and associated enforcement provisions upon all workers.The Order will amend sections 8, 9, 11 and 12 of the Employment Rights Act 1996 and the draft states it will come into force on 6 April 2019.
Pay statements to show hours from 6th April 2019
A further Order has been laid before parliament to require that payslips for employees and workers state the number of hours being paid where wages vary according to time worked; either as an aggregate number of hours or as separate figures for different types of work or different rates of pay. The Order will amend section 8 of the Employment Rights Act 1996 and the draft states it will come into force on 6 April 2019.
What will happen next? - other legislative change on worker status?
It is unlikely that there will be any legislative change any time soon (pending the outcome of the consultation). It is likely that the most robust change will be effected by the outcome of pending cases on worker status.
Taxation on termination payments- changes from 6th April 2018
From 6 April 2018 a new regime will apply to payments made in lieu of notice (PILON) on termination of an employee’s employment. The effect of the change will be that HMRC will tax as earnings the basic pay that an employee would have earned had they worked their notice in full, irrespective of whether there is a PILON clause in the employee’s contract. PILON clauses are often included in contracts of employment to ensure that an employer can terminate employment immediately without being in breach of contract, thereby preserving the enforceability of restrictive covenants.
Under the new rules, which were introduced by Section 5 of The Finance (No. 2) Act 2017, amending ITEPA 2003, the HMRC requires employers to split a termination payment into two parts: the amount treated as earnings and the amount that will attract the £30,000 tax-free exemption.
HMRC has confirmed that post-employment notice pay (PENP) calculations should not be applied to statutory and non-statutory redundancy payments.
This means that when calculating tax on an employee’s pay in lieu of notice, the part of the payment which must be treated as earnings includes
(a) all of the termination payment (except for redundancy pay) if the PENP is equal to or more than the termination payment
(b) the PENP if the amount is less than the termination award but is not nil.
Basic pay for the purposes of calculating the PENP excludes payments such as overtime, bonuses, commissions, gratuities etc.
HMRC has now clarified that where a contract of employment ends before 6 April 2018 the old rules for termination payments will apply.
Increases in National Minimum Wage from 1st April 2018
The National Minimum Wage (Amendment) Regulations 2018 come into force on 1 April 2018 and increase the national minimum wage as follows:
· Workers aged 25 or over (the national living wage) – from £7.50 per hour to £7.83
· Workers aged 21 or over (but not yet aged 25) from £7.05 to £7.38
· Workers aged 18 or over (but not yet 21) from £5.60 to £5.90
· Workers under the age of 18 from £4.05 to £4.20
· Apprenticeship rate from £3.50 to £3.70
Increase in statutory limits from 6th April 2018
The Employment Rights (Increase of Limits) Order 2018 brings into force the following increases on 6 April 2018:
· Maximum amount of a week’s pay from £489 to £508
· Award for unlawful inducement relating to trade union membership or activities or collective bargaining from £3907 to 4059
· Unfair dismissal basic award from £5970 to £6203
· Compensatory award for unfair dismissal from £80541 to £83682
· Minimum compensation when member expelled/excluded from union from £9118 to £9474
· Limit on guarantee payment per day from £27 to £28
Promoting and extending shared parental leave rights - Government launches campaign, and bill introduced to extend to freelances
The Government has launched a campaign to encourage more parents to take up Shared Parental Leave in their baby’s first year.
Meanwhile Labour MP and former actor Tracy Brabin has submitted the Shared Parental Leave and Pay (Extension) Bill to parliament which would allow maternity allowance to be shared in blocks between parents who work as freelancers, replicating the way in which shared parental leave works for those in more conventional employment. The Bill is expected to have its second reading debate on Friday 11 May 2018.
Flexible working for the armed forces from April 2019
In February 2018, the Armed Forces (Flexible Working) Act became law, having received Royal Assent. The Act amends the Armed Forces Act 2006 to enable provision to be made through secondary legislation for members of the regular forces to serve part-time or subject to geographic restrictions. According to the parliamentary briefing, the new measures will come into effect in April 2019.
Tax-free childcare to parents of under 12s
In April 2017 HMRC started rolling out tax-free childcare, which is aimed at helping working parents with the cost of childcare with up to £2,000 of support per child each year or £4,000 for disabled children.
From 15 January 2018 tax-free childcare opened to parents whose youngest child is under 9. The scheme opened to all remaining eligible families with children under 12 on 14 February 2018.
GDPR Update - Employers ‘walking into GDPR abyss’, more EC guidance and compulsory fees for controllers
A report from software technology firm Senzing has warned that organisations are ‘walking into a General Data Protection Regulation abyss’ with 60% of companies saying that they are unprepared for the EU’s GDPR.
One of the most significant areas of confusion is around employee data. Organisations have been warned that they may not be able to rely on historic clauses in employment contracts as consent to process employee information and may be asked to justify why they are handling certain employee data.
Note from Emplaw Online - it is absolutely the case that employers will not be able to rely on standard employment contract consent wording to process employee data but employers will have other lawful grounds for processing, eg it is necessary for a contract, or to comply with the law or for the employer's legitimate interests. What is key is that employers review what data they process and can demonstrate why one or more of the lawful grounds apply. They will also need to review their privacy notices accordingly.
EC guidance on GDPR
The European Commission has published guidance for national authorities on the General Data Protection Regulation, which comes into force in May 2018. It has also published guidance for businesses and individuals. Whilst the most comprehensive guidance remains the ICO guide, these EU Guides are clear and easy to read.
The Data Protection (Charges and Information) Regulations 2018
These regulations have been laid before Parliament to come into force on 25th May, at the same time as GDPR. They provide that data controllers must pay the ICO a data protection fee unless they are exempt. The new data protection fee replaces the requirement to ‘notify’ (or register), which is in the Data Protection Act 1998 . There are three different tiers of fee between £40 and £2,900, essentially dependent on the size of the organisation, There are exemptions but they are very limited. The ICO has published a draft guide including information on how to pay.
TUC report: Living on the Edge
The Trade Union Congress has produced a report comprising a detailed investigation of insecure work in three sectors: retail and logistics/delivery and higher education. The survey results showed clear lines of division in the labour market experiences of permanent employees and the casual workforce.
As compared to permanent employees, workers in casual employment are more likely: to be young, non-white and employed in an elementary occupation; experience lower job satisfaction and life satisfaction; have perceived low employment security; and higher levels of anxiety and depression and are more likely to anticipate losing their jobs and withdraw from the labour market.
Women are more likely to leave employment and have a lower likelihood of securing a permanent contract than men. Workers in fixed-term and casual employment are less likely than those in permanent jobs to be represented at work and are less likely to be trade unions members.
Sleep deprivation costs UK economy around £30 billion per year: toolkit launched to help employers
Business in the Community and Public Health England have launched a toolkit to help employers understand and reduce the risk of sleep deprivation and boost productivity in the workplace. They claim that 200 000 working days are lost every year due to employees not getting enough sleep. Those carrying out work such as shift work, travelling across different international time zones and those who drive for work present a particular health and safety risk.
Are companies repurchasing their own shares to artificially inflate executive pay? - Government announces research
The government has announced new research to be carried out by PwC into whether some companies are repurchasing their own shares to artificially inflate executive pay. The study forms part of the government’s corporate governance reforms and wider industrial strategy.
The research will help to understand how companies use share buybacks and whether any further action is needed to prevent them from being misused.
ONS analysis on understanding the gender pay gap
The Office of National Statistics has published analysis on the gender pay gap to provide insight into the factors that affect men and women’s pay. The main points are:
· The gender pay gap for full-time workers is entirely in favour of men for all occupations
· When looking at age groups, the gap for full-time workers remains small at younger ages; however from age 40 onwards the gap widens reaching its peak between ages 50 and 59
· For 2017, women’s pay growth in respect of age was lower than men’s pay growth and also stopped growing at a younger age
· Regarding job tenure, men who have worked for over 20 years in the same organisation earn 20.8% more compared with those men who worked for no longer than one year; for women, pay is 17.5% higher.
· In terms of occupation, men working in the chief executives and senior officials occupation earn almost four times more than men in elementary occupations; in the case of women, this is almost 3.5 times more.
· Results show that 36.1% of the difference in men’s and women’s log hourly pay could be explained by differences in characteristics between men and women included in the model; of those, occupation has the largest effect since it explains 23.0% of the differences between men’s and women’s log hourly pay.
Sexual harassment in the workplace inquiry
The government’s Women and Equalities committee is launching an inquiry into unwanted sexual behaviour in the workplace.
Boom in agency workers
According to research commissioned by the Resolution Foundation 34% of businesses currently using agency workers were doing so to fill as many positions as possible or to provide staffing for particular parts of their workforce. A quarter of the 500 HR professionals surveyed said they expected to increase their use of agency workers over the next five years.
The think tank has claimed that the use of agency workers has grown by 40% in the last 10 years, with around 800,000 currently working across the UK.
The Lord Chancellor & Anor v McCloud & Ors  UKEAT 0071/17 and Sargeant & Ors v London Fire and Emergency Planning Authority UKEAT/0116/17/LA and UKEAT/0137/17/LA
Whistleblowing Detriment: knowledge of decision maker key
Section 47B Employment Rights Act provides that a worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure.
Limits on national legislation which allow dismissal of worker on grounds of intermittent absences due to disability
This case concerns a request for a preliminary hearing concerning the interpretation of the Equal Treatment Framework Directive 2000/78/EC.
Decision to instigate investigation was continuing act of discrimination
This case concerns section 123 Equality Act 2010 in the context of a race discrimination claim. S. 123 provides that a complaint may not be brought after the end of the period of three months starting with the date of the act to which the complaint relates or such other period as the ET considers is just and equitable. However conduct extending over a period is to be treated as done at the end of the period.