2017 was an interesting year for employment law with Brexit, the gender pay gap, sexual harassment and the gig economy dominating the headlines and we can expect 2018 to continue in the same vein. ELAS employment law consultant Enrique Garcia takes a look at the areas to watch in the year ahead.
The gig economy
The future of the gig economy remains in the air as we await further clarification from the Supreme Court. EAT decisions against Uber and Pimlico Plumbers have been appealed to the Supreme Court and the eagerly anticipated rulings will have far reaching implications. Other cases against Deliveroo and City Sprint, among others, are still making their way through the tribunals and this could yet be the tip of the iceberg.
Employment status has long been the greyest area of employment law – is someone self-employed or are they really an employee or a worker? The Central Arbitration Committee (CAC)’s recent ruling that Deliveroo riders are self-employed has thrown more confusion into the arena, although it’s worth noting that this is not a binding authority. We await with interest the Tribunal ruling in the claim brought by 45 Deliveroo couriers to see how it compares to the CAC decision.
Gender pay gap reporting
The first gender pay gap reports are due to be published in April 2018 for the payroll period including the snapshot date of 6 April 2017. Information on any bonuses paid also needs to be published at the same time for the 12 month period ending April 2017. All companies which employ 250 or more are required to publish this information. There is no obligation for companies to explain the gender pay gap, nor any duty to address it if a company is complying with the Equality Act however, as we saw when the BBC published the salaries of its top earners, there can be huge fallout and potential reputational damage where a large gap is shown with no explanation. Furthermore, the best candidates may not be attracted to working for companies with a big gender pay gap if they feel that their gender will adversely impact their career prospects.
All companies with more than 250 employees are obliged to publish:
The difference between the mean hourly rate of pay for male full-pay relevant employees and that of female full-pay relevant employees
The difference between the median hourly rate of pay for male full-pay relevant employees and that of female full-pay relevant employees
The difference between the mean bonus pay paid to male relevant employees and that paid to female relevant employees
The difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees
The proportions of male and female relevant employees who were paid bonus pay
The proportions of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands
Settlement agreements
Changes to the taxation of termination payments are expected to take place from April 2018. Employer National Insurance Contributions (NICs) will apply for all settlements above £30,000 whereas previously they were only subject to tax. All Payments in Lieu of Notice (PILON) will be taxable under the settlement agreement, even if there is no specific PILON clause in the contract. Previously, tax only applied if there was a PILON clause – now it’s whether or not there is such a clause.
Employment allowance
From April 2018, employers will not be able to claim the Employment Allowance for one year if they have hired an illegal worker, been penalised by the Home Office or exhausted all appeal rights against that penalty. From an employment law stance, this reinforces the importance of always protecting your company by ensuring that you do right to work checks at the start of each employment. On the very first day of employment the first thing an employer should do is to introduce themselves and then take a copy of their passport, visa or other document that gives them the right to work. If an employee has a visa with an expiry date, a clear diary note should be made to seek an update when the visa is coming to an end. It is no longer good enough to say that you didn’t realise a visa had expired.
GDPR
The General Data Protection Regulation (GDPR) will take effect from 25 May 2018. It was introduced by the EU in order to strengthen data protection for all individuals within the EU, as well as addressing the export of personal data outside the EU. GDPR will be applicable in the UK despite Brexit. The main change companies should be aware of when the GDPR takes effect is that the liability that will come from breaching the regulations is huge; you can be fined up to four per cent of your global turnover or €20 million, whichever is higher.
People have more control over their personal data, including the right to be forgotten and it’s important that companies take all steps to protect personal data. Access to data will be quicker and will also be free, instead of the current £10.00 charge. However, a company can make a reasonable charge if the request is manifestly unfounded or excessive e.g. repetitive requests with a view to causing disruption. It’s essential that all staff who handle personal information understand the fundamental principles and requirements of GDPR, specialist training courses can help ensure you stay compliant.
National Minimum Wage/National Living Wage
These are two areas which will continue to increase in 2018, with the next raise coming on 1st April taking the National Living Wage up to £7.83 per hour for those over the age of 25. Companies who fail to pay the National Minimum Wage have nowhere to hide – twice a year the government publishes its ‘name and shame’ list, so it’s important to make sure that you are fully compliant.
The current National Minimum Wage is:
National Living Wage (25 years and over) – £7.50 per hour
21-24 year olds – £7.05 per hour
18-20 year olds – £5.60 per hour
16-17 year olds – £4.05 per hour
Apprentice rate – £3.50 per hour **applicable to apprentices aged 16-18 and those aged 19 years and over who are in their first year of apprenticeship. All other apprentices are entitled to the NMW for their age
On 1 April 2018 the rates will rise to:
National Living Wage (25 years and over) – £7.83 per hour
21-24 year olds – £7.38 per hour
18-20 year olds – £5.90 per hour
16-17 year olds – £4.20 per hour
Apprentice rate – £3.70 per hour **as above
Brexit
While it is still too early to tell how the employment law landscape will change following Britain’s exit from the EU, it’s important for companies to stay up to speed during the transitional period. For now it is business as usual. At least until March 2019 all current laws and regulations remain in place and businesses should continue to comply with all current legislation. It is undeniable that the UK landscape will alter and everyone will be affected by the change once we do leave the EU but it’s very unlikely that the UK will simply repeal all EU related law. Both the government and businesses want to avoid the legal and commercial chaos that would ensue where that to happen; instead we can expect a gradual repealing and restructuring of any laws which are less favourable to the UK.
2018 is going to be a transitional year requiring enormous negotiation and, while there are uncertain times ahead, there is no need to panic. We can expect things to be business as usual at least until March 2019 when the 2 year process of withdrawing from the EU ends.
Grandparental leave
It is anticipated that grandparents will be able to use the Shared Parental Leave system in order to help with childcare. No final details have been published but the proposed legislation could mean that a grandparent could use any untaken Maternity Leave/Shared Parental Leave that has not been used by the parents. They could also be entitled to any Maternity Pay/Shared Parental Pay that has not been used by the parents of the child. This is still at the proposal stage so we need to keep an eye on it to see if the government decides to pursue the proposed policy or not. At this stage, few people have used Shared Parental Leave since it was introduced so it’s unclear whether or not grandparents would actually use it, should it happen. Flexible working requests are likely to be a more popular choice.
Parental Bereavement Bill
The Parental Bereavement Bill is currently progressing through parliament. It is currently at committee stage which is the most detailed part of the process, and will then need a 3rd reading in the House of Commons before going to the Lords. This Bill will entitle employees who lose a child under the age of 18 to take two week’ leave which will be paid at the statutory rate, if they have 26 weeks’ service. Currently, employed parents only have a day-one right to take a reasonable amount of unpaid time off in order to deal with an emergency involving a dependent, including death of a dependent.
The government confirmed its backing for the Parental Bereavement (Leave and Pay) Bill in October 2017 but it’s unlikely to take effect in 2018, more likely 2019 or even 2020. Once it has passed all the parliamentary stages it will then require regulations to be made to define who gets the leave beyond just the mother and father in order to become law.
Further reading on employment law
