Emplaw Monthly - December 2018
New at Emplaw Online
Your essential briefing on The Good Work Plan and what the draft legislation says
On 17 December 2018 the government published its proposals to take forward some of the recommendations in the Taylor Review of Modern Working Practices (the Good Work Plan). Click here for the Emplaw briefing which explains the proposals and the draft legislation that has already been introduced in some of the key areas.
Employment highlights of 2018 and looking ahead to 2019
From non-disclosure agreements to the gig economy, from whistleblowing to corporate governance and new family rights, there have been some key developments in 2018. Click here for our annual essential summary of the year's employment happenings and to know what to look out for in 2019.
Brexit, deal or no deal – what does it all mean for employment law?
Click here for an article from Emplaw which explains how we have got to where we are (a clear timeline and summary of what is already in place) and what no deal or a deal in line with the current draft withdrawal agreement would mean for employment law.
Parental Bereavement leave
Following the passing of The Parental Bereavement (Leave and Pay) Act 2018 and the conclusion of government consultation, we have published a summary guide to what we know so far.
The guide is part of series published by Emplaw with regards to recent Acts.
They are up to date, straight forward and set out the key provisions and consequent Regulations and Codes. Find the list here. Full content is available to Emplaw Online subscribers only
The Good Work Plan
The big news is of course the publication of The Good Work Plan, the government proposals to implement the Taylor Review recommendations. Already draft legislation has been published covering some of the areas. Proposals include
Legislation to allow all employees and workers with varying hours and shift patterns (including agency and zero hours workers) to formally request a more fixed working pattern after 26 weeks of work for the same employer.
continuous service for the purpose of qualifying for certain employment rights to be deemed not to be broken where there is a gap between assignments or a pause in work of up to 4 weeks (the present limit is one week)
Legislation which will lower the threshold required to set up Information and Consultation arrangements from 10% to 2% of employees. Indeed, the Government has already published draft Employment Rights (Miscellaneous Amendments) Regulations 2019 which contain the necessary statutory provisions, to come into effect from 6th April 2020.
Legislation to ban employers from making deductions from staff tips
Legislation to increase the maximum level of penalty imposed by employment tribunals in cases of aggravated breach to £20,000. The draft Employment Rights (Miscellaneous Amendments) Regulations 2019 contain the necessary provisions, to come into effect from 6th April 2019.
Written statement of rights on appointment to have more information and be extended to workers(including agency workers). The provisions to extend the existing employee right to a written statement of particulars of employment and associated enforcement provisions to workers are contained in the draft Employment Rights (Miscellaneous Amendments) Regulations 2019, The provisions to make the right to a written statement of particulars of employment a day 1 right and additional particulars which must be included in the written statement have been set out in draft Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 , both to come into effect from 6th April 2020.
The Swedish derogation for agency workers (which excludes agency workers who have an employment contract with an agency from the right to the same pay as workers who work directly for the same employer) is to be scrapped. The draft regulations to do this have been published (The Agency Workers (Amendment) Regulations 2019)
The government proposes to legislate to improve the clarity of current employment status tests,
With regard to holiday, the pay reference period for workers with non-standard hours will increase from 12 to 52 weeks..Legislative provison for this is set out in The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018
Code of Practice on Sexual Harassment
On 18th December 2018, the government announced it that it will Introduce a nunmber of actions in response to the Women and Equalities Select Committee report (see our July update) including a new statutory code of practice on sexual harassment, which will be developed by the Equality and Human Rights Commission under its Equality Act 2006 powers.
EMPLOYER/EE GUIDANCE/ADVISOR NEED TO KNOW
Government guidance on calculating the minimum wage
The government has updated its guidance on calculating the minimum wage to include guidance on unpaid work trials. The guidance states that some employers may use unpaid trial work periods to obtain work or services for which at least the national minimum wage or national living wage must be paid. Current law does not however define a ‘trial work period’ or state precisely when the NMW or NLW must be paid.
Investment Association Principles of remuneration
The Investment Association has published principles of remuneration 2018.
The 2018 Principles of Remuneration set out investor expectations and best practice for how companies should pay their top executives in line with the new Corporate Governance Code. Under the new Principles, investors will expect companies to:
- Pay pension contributions to directors in line with the rate given to the majority of the rest of the workforce, rather than giving higher payments as a mechanism for increasing total remuneration;
- Broaden the triggers under which malus and clawback provisions can be used to forfeit or recover remuneration beyond the current triggers of ‘gross misconduct’ and ‘misstatement of results’, in order to make them a more effective tool to recover bonuses. Companies should also set out the process for implementing malus and clawback, not simply the triggers;
- Require directors to hold a proportion of their shares for a minimum of two years after their departure, so that they consider the long-term value of the company even after their departure;
- Adopt new pay ratio reporting requirements early, to maximise transparency over pay and ensure that there is accountability for high levels of pay internally.
Insurers come under the SMCR
On 10 December the insurance sector became subject to the Senior Managers and Certification Regime. The SMCR now applies to all dual regulated insurance and reinsurance firms and will replace the senior insurance managers regime and the approved persons regime for insurance firms.
Wates corporate governance principles for large private companies
The Wates Principles on corporate governance were launched this month. They will apply to company reporting for financial years starting on or after 1 January 2019. The principles apply on a voluntary ‘apply and explain’ basis to large private companies. This means that boards should apply each principle by considering it individually within the context of the company’s individual circumstances.
The Principles complement the Companies (Miscellaneous Reporting) Regulations 2018 which were introduced in June (to apply from 1 January 2019) which require all companies of a significant size (companies with more than 2,000 employees or a turnover of more than £200 million and a balance sheet of more than £2bn) that are not currently required to provide a corporate governance statement to disclose their corporate governance arrangements. Companies should also have regard to the 2018 Regulations where these apply to them.
Unlike the corporate governance code which sets out additional provisions which must be complied with the Wates Principles offer guidance under each principle. This guidance does not need to be reported on.
Companies should also provide a supporting statement that provides an understanding of how their corporate governance policies and processes work to achieve the desired outcome.
The six principles are:
- purpose and leadership
- board composition
- director responsibilities
- opportunity and risk
- shareholder relationships and engagement
CONSULTATIONS AND REPORTS
Low Pay Commission 2018 report
The Low Pay Commission has published its 2018 report which contains analysis and evidence underpinning the LPC’s national living wage and national minimum wage recommendations.
Low Pay Commission Response to the Government on 'one-sided flexibility'
Published alongside The Good Work Plan (see above) was LPC's response to the Government's request to make recommendations on 'one-sided flexibility', as identified in the Taylor Review of Modern Working Practices. Recommendations include a right to switch to a contract which reflects normal hours and a right to reasonable notice of work schedule. In the Good Work review, it is stated that the government is taking action by introducing a right to request a more stable contract and they will consult on the Commission’s other proposals.
Restrictive covenants extending to wider family members not subject to restraint of trade doctrine
This case deals with restrictive covenants contained in a share purchase agreement. The relevant clause provided that John and Caroline Nekrews should not and should procure that no associate of theirs should compete with the business for a period of three years from the completion date. The definition of associate included spouse, civil partner, relative, spouse or civil partner of a relative, relative of any of the above’s spouse or civil partner.
ET can depart from agreed list of issues
In this case the EAT held that, in circumstances where a list of issues agreed at the outset categorised an allegation as a working time claim and not as a protected disclosure claim, an ET should have departed from the agreed list. In this case, to have not departed from the agreed list would have impaired the discharge of the ET’s duty to determine the case in accordance with the law and the evidence.
Ms Saha in person
David Maxwell (instructed by Irwin Mitchell)