Category Archive: Reform

Queen’s Speech unveils employment law changes

Today the Queen unveiled the Government’s legislative programme for the new two-year Parliament. This included a number of employment law reforms, aside from the impact of Brexit:

  • There will be a new national policy on immigration. However, there is currently very little detail about what the new policy will be. The Conservative party manifesto included an objective to reduce annual net migration to below 100,000, a commitment to double the Immigration Skills Charge levied on companies employing migrant workers to £2,000 a year by the end of the Parliament and to ask the independent Migration Advisory Committee to make recommendation about how the visa system can become better aligned with the Government’s modern industrial strategy, with a view to setting aside significant numbers of visas for workers in strategically-important sectors, such as digital technology. However, future immigration policy is an area where the DUP may seek to exert some influence and the immigration policy in respect of EU citizens is likely to evolve during the course of the Brexit negotiations.
  • The National Living Wage will be increased. The manifesto committed to a rise to 60% of median earnings by 2020 and then by the rate of median earnings.
  • The Government will enhance rights and protections in the modern workplace. The detail of this policy is likely to be informed by the Taylor Review on modern employment practices which is due to report imminently.
  • The Government will take further action to tackle the gender pay gap and discrimination. It is not clear what this will comprise. The manifesto said that the government would  require companies with more than 250 employees to publish more data on the pay gap between men and women and continue to work for parity in the number of public appointments going to women, as well as pushing for an increase in the number of women sitting on boards of companies. There were also references to helping disabled people into work.
  • There will be a new law on data protection. The new European GDPR will apply to the UK from May 2018, but will need to be replaced when the UK leaves the EU. The Government will need to either bring the GDPR directly into UK law in its current form, or introduce new rules with very similar principles, in order to ensure that the UK continues to have adequate data protection rules in the eyes of the EU. This is important to avoid any barrier to personal data flowing from the EU to the UK after Brexit and should not deter organisations from continuing their preparation for GDPR.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/queens-speech-unveils-employment-law-changes/

New European data protection rules will have significant impact on employers

Today’s adoption of the new EU General Data Protection Regulation (GDPR) heralds a new dawn in data protection, with far-reaching consequences for employers. For many, there will need to be a wholesale change in culture with a brand new approach to processing personal employee data. It is likely that existing practices will fall far wide of the mark and will require substantial review before the GDPR takes effect in 2018.  The importance of this cannot be overstated due to the introduction of extremely onerous sanctions which will heavily penalise breaches of the GDPR.

Although the new regime is challenging, compliance is achievable provided suitable planning and preparation is undertaken, and the correct steps are taken at the right time – beginning with a thorough audit of existing practices for data processing. The UK’s Information Commissioner’s Office (ICO) has published useful guidance for employers on the “12 steps to take now“. In order to meet the new obligations, co-operation in, and understanding of, the issues across the business is critical and employers are therefore likely to need Legal, HR, IT and Compliance teams to take an integrated approach.

Red flags for employers

The most important issues for employers, potentially involving changes to existing practices and/or new and significant administrative burdens, will include:

  • Grounds for processing employee data need to be audited: Employers will need to carefully consider the basis on which they process employee data. Employee consent to processing will almost certainly be invalid in the employment context, and, in any event, can be withdrawn at any time. Grounds which have been historically relied on, such as the employer having a legitimate interest in the data processing, will be subject to challenge due to a new right for employees to object to processing on this ground which cannot be overridden unless the employer has compelling legitimate grounds for the processing.
  • Data subject access requests will be easier for employees:  Employees will be able to make data subject access requests without restriction and without payment of a fee, unless the requests are manifestly unfounded or excessive. Employers must respond without ‘undue delay’ and no later than 1 month (subject to a 2 month extension for complex/multiple requests). At present, there are no exemptions (even on the grounds of legal privilege) which an employer can rely on to avoid provision of the employee’s personal data.
  • Extensive information will have to be given to employees when obtaining personal data: An administratively onerous net is cast over employers with the requirement to provide an extensive list of information to employees at the point when employers obtain their personal data.
  • Routine criminal records checks may not be allowed: Employees may have to review any policy of routinely conducting standard (ie not enhanced) criminal records’ checks. Under the new regime this appears to be unlawful on the basis that there is no requirement under UK law to carry out these checks.
  • Employees have new rights to erasure and rectification of their personal data: Employers must promptly erase an employee’s data if one of a number of ground applies, including that the data is no longer necessary for the purpose for which it was collected. Where data is alleged to be inaccurate, employers will also have onerous responsibilities to check and rectify the data and will be restricted as to how it is used in the interim.
  • Employees have the right not to be subjected to automated decision making: Unless it is necessary for entering into, or performance of, a contract between the employer and employee, is authorised by EU or UK law or is based on the employee’s explicit consent, employees have the right not to be subject to automated decision making, including profiling if it impacts on them legally or significantly. This is likely to apply to matters such as automated shortlisting; performance management triggers for sickness absence; attendance bonuses; holiday or shift rostering. Employers will therefore need alternative mechanisms for decision making if challenged.
  • Employers must notify any data protection breaches within 72 hours: Employers will have to notify the relevant national data protection authority (in the UK, the ICO) within 72 hours of becoming aware of a data protection breach resulting in unauthorised loss, amendment or disclosure of data, unless the breach is unlikely to result in a risk to the rights of the employees. If there is a high risk to employee rights employers will also have to promptly communicate the breach to the employees individually.
  • Employers must be audit ready at all times: Employers are expected to set up systems in a way which ensures compliance by design and default – restricting the data, use and access. The onus is on employers to prove compliance and they must keep records and have policies in place to demonstrate that.
  • Data protection standards may be ‘ramped up’: The long awaited harmonisation arrangements mean national supervisory authorities will be required to co-operate, assist each other in performing their tasks, provide mutual assistance and to actively take steps to achieve consistent application throughout the European Union. On the basis that it is unlikely that member states with stringent laws on data processing will want to compromise their protection, this may lead to a ‘ramping up’ of data protection across Europe to the highest denominator. The concept of lead supervisory authorities for cross-border processing is also being introduced which may be administratively beneficial for multi-national organisations; however, as the national supervisory authority will remain competent in a number of circumstances, it will remain to be seen how effective having a lead authority is in practice.
  • Transfers of data to third countries may be easier: Under the new regime, personal data may be transferred to a third country or an international organisation where there is a Commission finding of adequacy, if appropriate safeguards are in place eg binding corporate rules or standard contractual clauses adopted by the Commission or the ICO, or if one of a number of prescribed derogations is met. The recent impact of the Schrems case (which declared the Safe Harbour regime ineffective) will therefore potentially be resolved if the EU-US Privacy Shield is given a final finding of adequacy.
  • Sanctions are extremely onerous: Infringements relating to matters including the basic principles for processing (including conditions for consent) and the rights of data subjects will attract maximum penalties of €20,000,000 or 4% of total worldwide annual turnover, if higher.
  • Appointment of a DPO may be required: must do so if they are a public authority, are required to do so by local law or have core activities which require regular and systematic monitoring of individuals on a large scale or they carry out large scale processing of sensitive data or criminal records. The DPO is expected to be an expert in data protection law and will have significant responsibilities in ensuring compliance with the GDPR.With the regulation expected to enter into force in 2018 (and no need for national implementing legislation), employers would be wise to use this lead-in period to fully analyse their existing data processing habits, question what data collection and processing is truly necessary for the employment relationship and introduce new policies and procedures to manage the data.

With the regulation expected to enter into force in 2018 (and no need for national implementing legislation), employers would be wise to use this lead-in period to fully analyse their existing data processing habits, question what data collection and processing is truly necessary for the employment relationship and introduce new policies and procedures to manage the data processing cycle so that they can enter 2018 with their house in order, fully equipped to address the data processing challenges ahead.

There is no doubt that the arrival of the GDPR is timely, coming at a point when information and communication technologies now underpin all aspects of the employment relationship and when employee awareness of individual privacy rights is high. Employers who have previously taken a more pragmatic view of compliance for employee data, prioritising protection of consumer and customer data instead, can no longer afford to do so.

For general information on data protection issues, view DLA Piper’s GDPR website and Privacy Matters blog.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/new-european-data-protection-rules-will-have-significant-impact-on-employers/

The Scotland Bill’s proposed impact on Employment Tribunals: have your say

Summary

At present, the UK Government retains powers in relation to employment law and the operation of Employment Tribunals in Scotland. This means that the same rules and procedures apply to tribunals throughout the UK. As recommended by the Smith Commission, proposals have now been put forward to devolve the management of employment tribunals in Scotland to the Scottish Government. Powers relating to employment legislation will remain with the UK Government.

The Scottish Government has issued a consultation paper summarising their proposed changes.  We are currently drafting our response to the consultation paper and are eager to include the views of our clients and contacts as part of this process.

The proposals

The Scottish Government’s proposals envisage that employment tribunals in Scotland would cease to exist as a separate and distinct form of tribunal.  Instead, they would be incorporated as part a unified tribunal structure applying across all Scottish tribunals, albeit they would still be dealt with by specialised judges.  No mention has been made about Employment Tribunal fees, however, in devolving the tribunal system the Scottish Government would gain the power to remove the current fees regime. It is worth noting that there are also proposals in England & Wales which suggest making significant changes to the way in which Employment Tribunals operate.  This raises the prospect that procedure north and south of the border could become significantly different in a short space of time.

A Scottish case – to be or not to be?

A key aspect of the proposed devolution is the identification of what amounts to a Scottish case which should be dealt with under the devolved process.  Whilst this would be apparent in the vast majority of cases, there will be many examples where there is the potential for dispute.

In order to deal with such cases, the draft legislation provides for both “Scottish cases” (where the employer is based in Scotland, the acts of complained of took place in Scotland and the employee normally works in Scotland) and “Concurrent cases” where some link can be shown to Scotland (under the current proposals this might only need to be that the company “carries on business in Scotland”).

Scottish cases must be heard in the new Scottish tribunal, whilst concurrent cases may be heard in Scotland.  In relation to the latter we assume that determining this point would require a preliminary hearing.

The Scottish Government and BIS have already conceded that their proposals are flawed and require further thought.  Given the Scottish Government’s suggestion that fees will be removed under a devolved system, it will important to have a clear and fair means of identifying jurisdiction to avoid claimants south of the border using Scotland as a cheaper alternative.

Consultation

The Scottish Government has issued a consultation paper summarising the proposed changes which it is looking to implement.  It has also posed the following two questions in relation to the proposed drafting as well as a general request for comments on the proposals:

  1. Do you consider that the provisions of the draft order adequately reflect what is a Scottish case? and
  2. Do you feel that the provisions of the draft order appropriately define those cases that have a sufficient connection to Scotland?

We are looking to put together a consultation response from the firm.  Whilst this will reflect our own views and opinions on the proposals, we would also like to incorporate the views of our clients and contacts as part of the process and we would welcome your comments.  Any comments which you provide will be treated confidentially and we will not disclose you or your Company’s name as part of our response unless you are happy for us to do so.

The consultation is due to close on 24 March 2016.  We would therefore ask that you provide us with your comments by no later than 4 pm on 22 March 2016.

Full details of the current proposals and a copy of the Scottish Government consultation paper can be found here. For more information please contact Kate Hodgkiss, Julie Simpson or Euan Bruce

Permanent link to this article: http://www.dlapiperbeaware.co.uk/the-scotland-bills-proposed-impact-on-employment-tribunals-have-your-say/

Government releases details of Trade Union Bill

With the disruption caused by last week’s tube strikes still fresh in people’s minds, the Government has today published a press release providing further details on its proposals for strike reform.

The proposals are in response to a number of strikes in recent years which have arguably caused significant disruption to business and consumers, despite, on the figures, not being supported by a majority of the particular workforce.  This situation has arisen because a lawful strike needs only the support of a majority of the workers voting, meaning that very low turnouts of voting workers can still result in legitimate industrial action.

The Government has now confirmed that it will introduce a Trade Union Bill which will implement:

  • A 50% threshold for ballot turn-outs;
  • An additional threshold of 40% of support to take industrial action in key public services such as education and transport;
  • A 4 month time limit for industrial action from the date of the ballot;
  • Changes to the ballot paper to give a clear description of the trade dispute and the planned industrial action;
  • A requirement for members to make an active choice of opting-in to contributions to political funds; and
  • Safeguards to ensure non-striking members of a workforce are able to continue work without intimidation.
  • The Government will consult on a number of its proposed measures including:
  • The proposed introduction of the 40% threshold for strikes in essential public services;
  • Reforming and modernising the rules and codes of practice on picketing and protests linked to industrial disputes; and
  • The repeal of a ban on the use of agency workers.

The consultation will open today and run until September 2015.

Trade unions are, unsurprisingly, highly opposed to the proposed reforms, stating that the proposals will make legal strikes “close to impossible”. UNITE has gone further and indicated this week that it has passed a motion to remove from its rule book the words caveating strike action, “so far as may be lawful”.

The real impact remains to be seen, however.  There is no doubt that the reforms will have a significant impact on sectors which have traditionally seen low levels of turnout, for example in essential public and civil services – where not only a 50% turnout but also a 40% threshold of support will apply.  However, whether this will lead to a reduction in strikes remains to be seen; given the potential sanctions for trade unions in relation to illegal strike activity, unlawful action seems unlikely, despite UNITE’s  amendment to its rules. Employers should, however, remain vigilant to potentially unlawful activity.  Where legal picketing is curbed, employers may see more ancillary protests where employers need to look more broadly at the laws of nuisance and other non-industrial torts, and become more creative about how they deal with concerted action by trade unions. Unions may also adopt a more militant approach in an attempt to galvanise the workforce into turning out and voting.  However, a number of sectors, such as transport, have historically had high levels of turnout in support of industrial action and would already meet the new thresholds. In the rail industry, RMT recently obtained a 60% turnout with an 80% vote in favour of strike action.  In practice, therefore, the impact of the new reforms may be limited in some sectors.

Where lawful strike action does take place, being able to use agency workers to cover striking workers may also not be the ideal solution it seems; this is potentially a piecemeal approach which does not adequately meet the needs of employers or their customers.  The outcome of the consultation on this will therefore be awaited with interest.

We will report on the progress of the Bill in future alerts.

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/government-releases-details-of-trade-union-bill/

Transparency in supply chains: The Modern Slavery Act 2015

Jonathan Exten-Wright, a Partner in our London office, comments: Worker welfare in global supply chains is back on the agenda.

While historically there were voluntary initiatives in “soft law” terms such as the UN Guiding Principles, which required multinationals to give this their attention, now there is a momentum towards compulsory reporting in non-financial narratives by major corporations. This will move forward in the EU with the coming into force by December 2016 of a Directive requiring some 6,500 companies to report on their human rights position, including labour matters.

In the UK, the landmark Modern Slavery Act 2015, which requires transparency, reporting and the taking of preventative steps in supply chains relating to forced labour and human trafficking, received Royal Assent at the end of March. This gives urgent legal force to addressing these issues.

From “soft law…”

Since the ground-breaking “Protect, Respect, and Remedy” Framework was adopted by the UN in 2011, companies are expected to respect human rights throughout their business operations.  The UN Guiding Principles (UNGP) detail how companies can know and show that they respect human rights in practice.

Companies are expected not only to avoid causing or contributing to adverse human rights impacts, but to address “human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts”.  Thus businesses have a responsibility to address adverse human rights impacts through their own activities and across the entirety of their value chain.

Suppliers represent a particular challenge for companies: adverse human rights impacts can occur at any level of a supply chain – from the bottom tier of direct or strategic suppliers, all the way through via multiple layers of sub-suppliers and sub-contractors, to those at the end of the supply chain that provide raw material inputs.

…to “hard law”

Under the Modern Slavery Act 2015, larger businesses with a certain level of turnover derived from their UK operations will be required to publish an annual slavery and human trafficking statement.  This will mean that any relevant commercial organisation in scope by virtue of the turnover definition – to be announced by the UK Government shortly -which supplies goods and services in the UK will need to report on what actions they have taken to ensure their supply chain is “slavery free”.  Businesses will need to describe the steps they have taken to ensure that slavery and human trafficking is not taking place in their supply chains or any part of their own business.  The statement will require director sign-off.

Because of the larger number of companies likely to be affected, this potentially has a much wider application than the strategic reporting requirements for quoted companies alluded to above.  The UK Home Office consultation into what size of company this new reporting requirement will affect closed in May 2015.  The outcome of that consultation will be published in advance of the commencement of the relevant sections of the Modern Slavery Act  which are expected to come into force in October 2015 (although this is yet to be confirmed by the Home Office). At that point we will know the full scale of the impact on businesses operating in the UK, with Government Guidance to follow.

The Modern Slavery Act also criminalises arranging or facilitating human trafficking or being an accessory to such offences.

For commercial organisations operating in the UK, these provisions have extraterritorial application.

Key points to note

So, what are the five key issues to know about the Act?

1.   Action will be expected

Businesses operating in the UK need to ensure their end-to-end supply chains are free from slavery. Taking its cue from Californian legislation, the Act will require businesses to provide a statement on the steps they are taking to prevent slavery and human trafficking in their supply chains and their own business.

2.  Ensuring transparency

The statement must be signed off by a director or equivalent and published on the company website to ensure senior management engagement and transparency.

3.   Embedded in law

The UK Government’s consultation as to which businesses will be in scope, using the measure of turnover, concluded on 7 May. The future Guidance is expected to cover the information to be included in such statements – including policies that are to be adopted, due diligence processes that could be used, how risk in a supply chain can be assessed and managed, training to staff, and monitoring. No longer about corporate social responsibility or brand protection, such transparency will be a legal requirement.

4.   Measuring effectiveness

Businesses should be looking at how they show they respect human rights and prevent human trafficking and modern slavery in their supply chains, the use of appropriate mechanisms to ensure adherence to human rights standards, and how they measure the effectiveness of the steps they are taking and report this back. Moreover, there is even the theoretical risk of being an accessory to criminal offences committed in the UK or overseas: this cannot be taken lightly.

5.   Integrating the law

Integrating human rights and labour issues into existing risk management processes, identifying material and salient risks, and revisiting sourcing strategy and supply chain management will be necessary. Businesses should be considering now how they plan to comply, prevent abuses, and report on their actions.

How we can help?

With so much at stake, companies and their directors need specialist advisors to help them navigate this new terrain. With leading labour law, human rights and regulatory and government advisory expertise, DLA Piper is well-placed to be your human rights trusted advisor. We have global reach and local knowledge of the salient risks which are pertinent to each jurisdiction, making us ideally placed to support companies during the complete life-cycle of human rights issues almost any business can face.

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/transparency-in-supply-chains-the-modern-slavery-act-2015/

Upcoming changes to employment law

Ben Gorner, a partner in our Birmingham office, comments: In recent weeks the Government has announced a number of key changes to employment law which will be coming into force in the next few months.

Rates and limits

Changes to tribunal compensation limits, which historically took effect in February, have been moved to April. On 6 April 2014 the maximum compensatory award for unfair dismissal will rise from £74,200 to £76,574. The maximum amount of a week’s pay, used to calculate redundancy payments or various awards including the basic or additional award of compensation for unfair dismissal, also rises from £450 to £464. The new rates will apply to any dismissals where the effective date of termination is on or after 6 April 2014. Different rates apply in Northern Ireland. Other changes to statutory rates and limits will also come into force on 6 April, including changes to statutory maternity pay and statutory sick pay. For full details of the new limits click here to access the rates and limits section.

Early conciliation in tribunal proceedings

On 18 February the government confirmed that the new ACAS early conciliation (EC) scheme will be available to claimants from 6 April 2014 and mandatory for tribunal claims presented on or after 6 May 2014.  EC comprises a four-step procedure under which a prospective claimant is required to contact ACAS before issuing relevant proceedings (which includes the majority of claims):

Step 1: The prospective claimant must send “prescribed information” in the “prescribed manner” to ACAS. This information is limited to the name and address of the prospective claimant and respondent.

Step 2: After an early conciliation support officer has made initial contact with the prospective claimant and confirmed that they wish to proceed, the claimant’s information is sent to a conciliation officer.

Step 3: The conciliation officer must try to promote a settlement within a “prescribed period”.

Step 4: If a settlement is not reached, either because the conciliation officer considers that settlement is not possible, or because the prescribed period expires, the conciliation officer must issue a certificate to that effect. The prospective claimant will be unable to pursue most tribunal claims without this certificate.

There is no requirement on either party to actually engage in conciliation. The immediate impact for employers will be delay in employees bringing claims. The EC scheme provides for the usual three month limitation period to bring a tribunal claim to be extended to take account of the conciliation period.

Flexible working

Finally, the right to request flexible working will be extended to all employees, not just carers and parents, with effect from 30 June 2014. The right to request flexible working will apply to all employees with 26 weeks’ qualifying service with the employer. The statutory request procedure will be repealed and replaced with a duty on employers to deal with requests in a reasonable manner and within a reasonable period of time. Although the final legislation has not yet been published, it seems likely that:

  • The employee will continue to have to include prescribed information in their application
  • The statutory grounds for refusal will continue to apply
  • There will be a time limit of three months for the employer to make a decision on the employee’s request but this period may be extended by mutual agreement
  • Employers will be able to treat an application as withdrawn if the employee fails to turn up to two application/appeal meetings without good reason and the employer notifies the employee that it has decided to treat the employee’s conduct as a withdrawal of the application
  • The limit of one request per 12 months will continue to apply
  • Employees will be able to bring a complaint in the employment tribunal if the employee considers that:
    • the employer has not dealt with their application in a reasonable manner or they have not been notified of the employer’s decision within the 3 month time period (or such mutually agreed extended period);
    • the employer’s decision to reject their application was based on incorrect facts; or
    • the employer’s notification to the employee that they considered their application to be withdrawn did not meet the statutory requirements
    • An employment tribunal complaint cannot be made until the employer has notified the employee of its decision or the 3 month period (or such extended period as has been mutually agreed) comes to an end without the employer notifying the employee of its decision. A complaint in relation to deemed withdrawal may be made as soon as the notification of deemed withdrawal is given to the employee.

ACAS has published a guide to handling requests to work flexibly in a reasonable manner.

Employers are likely to need a new flexible working policy to reflect the change in eligibility and procedure.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/upcoming-changes-to-employment-law/