Tag Archive: employment law reforms

April changes to employment law

April 2016 will see a number of important developments in employment law take effect. Here is a round-up:

 

Date What’s new? Relevant legislation
1 April The new National Living Wage (NLW) will apply to workers aged 25 and over at a rate of £7.20 an hour.

The NLW is, in effect, a new band of national minimum wage (NMW). This means that all the existing provisions for determining whether the NMW has been met (including the provisions on which pay and benefits count towards meeting the NMW, and which do not) apply to NLW in the same way.

The Government has published guidance on Calculating the minimum wage.

The penalty for non-payment of the NMW/NLW also increases to 200% of the total underpayment (up from 100%) but, as before, the penalty will be halved if paid within 14 days.

National Minimum Wage (Amendment) Regulations 2016
6 April A new scheme will penalise employers who fail to pay tribunal awards or COT3 settlement sums.   Employers may be issued with a warning notice, and then, if payment is still not made, with a penalty notice.  The penalty, payable to the Secretary of State, is set at 50% of the unpaid sum, subject to a minimum of £100 and maximum of £5,000 (halved  by 50% if the unpaid sum plus penalty are paid within 14 days of the penalty notice). Small Business, Enterprise and Employment Act 2015 (Commencement No 4) Regulations 2016
6 April New tribunal rules, which will apply to cases brought on or after 6 April, will limit each party in a case to 2 postponements; introduce a deadline for postponements of 7 days before the hearing; and require a costs or preparation order to be considered where a successful application for a postponement is made less than 7 days before the hearing. Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2016
6 April The maximum compensatory award for unfair dismissal rises from £78,335 to £78,962. The Employment Rights (Increase of Limits) Order 2016
6 April The maximum amount of a week’s pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, rises from £475 to £479. The Employment Rights (Increase of Limits) Order 2016

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

Be Aware review of the year 2015

Adam Hartley, Partner and UK Employment Group Head, highlights the most important legislative and case law developments from 2015 and identifies the key developments to watch out for in 2016 in the annual Be Aware review of the year.

 

2015 LEGISLATION ROUND UP
Employment tribunals
5 April 2015 Cap on a week’s pay increased from £464 to £470.
5 April 2015 Unfair dismissal compensatory award increased from £76,574 to £78,335 (or 52 weeks’ pay whichever is the lower).
28 October 2015 HMCTS has developed a simpler and faster fee remission process in the employment tribunals. Under the new scheme, which is called “Help with Fees applicants self-assess their eligibility for fee remission and are no longer required to submit paperwork in support of their application. Instead, HMCTS check directly with the Department for Work and Pensions whether an applicant is eligible for fee remission. .
Family friendly
5 April 2015 Shared parental leave came into effect in respect of parents expecting a baby, or matched for adoption, on or after 5 April 2015. It allows employees to share up to 50 weeks of leave.
5 April 2015 Statutory maternity, adoption, paternity and shared parental pay increased from £138.18 per week to £139.58.
Increased rights for adopters: Removal of 26 service requirement for adoption leave, statutory adoption pay brought in line with statutory maternity pay. Adoption rights extended to adoptions from outside the UK.
5 April 2015 Age of child for the purposes of entitlement to unpaid parental leave increased from 5 to 18.
Modern slavery
29 October 2015 The government made two sets of regulations relating to the Modern Slavery Act 2015 (MSA). Their combined effect is to require commercial organisations to prepare an annual slavery and human trafficking statement for each financial year ending on or after 31 March 2016 in which their total turnover is above £36 million. The regulations are:The Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015: Section 54 of the MSA requires commercial organisations to prepare a slavery and human trafficking statement for each financial year in which their total turnover is above the prescribed amount. These Regulations set the amount of total turnover at £36 million. They also provide that total turnover will be determined by taking into account the global turnover of the organisation and its subsidiary undertakings (see section 1162 of the Companies Act 2006 for the meaning of “subsidiary undertaking”). The total turnover includes the amount derived from the provision of goods and services falling within the ordinary activities of that organisation and its subsidiary undertakings, after deducting trade discounts, value added tax and other taxes.The Modern Slavery Act 2015 (Commencement No. 3 and Transitional Provision) Regulations 2015: These bring section 54 into force on 29 October 2015. There is a transitional provision which provides that the requirement only applies in respect of financial years ending on or after 31 March 2016.The Home Office has also published guidance on the content of the slavery and human trafficking statement.For more information see our Be Aware alert.
National minimum wage
26 May 2015 Maximum penalty per worker for failure to pay the NMW increased to £20,000.
Zero hours contracts
26 May 2015 The Small Business , Enterprise and Employment Act 2015 brought into force a ban on exclusivity clauses in zero hours contracts. For more information see our Be Aware alert.

 

2015 CASE LAW ROUND UP
Agency workers
Coles v Ministry of Defence (EAT) The EAT upheld a tribunal’s decision that the scope of regulation 13, Agency Workers Regulations 2010 is limited to providing agency workers with a right to be informed of vacancies within the end user company. It rejected arguments that agency workers were entitled to be afforded equal status with comparable permanent employees in being considered for a vacancy. In dismissing the appeal, the EAT declined to make a reference to the European Court of Justice regarding the interpretation of the Temporary Workers Directive.
Annual leave
Lock v British Gas Trading (ET) The week’s pay provisions of the Employment Rights Act 1996 should be re-written for the purposes of the WTR and that commission and other similar payments are included in holiday pay.
Patterson v Castlereagh Borough Council (NICA) The Northern Ireland Court of Appeal held that there is no reason in principle why voluntary overtime should not be included in statutory holiday pay for the purposes of the Working Time Regulations (Northern Ireland) 1998 (which are substantively the same as the Working Time Regulations 1998). It will be a question of fact for each tribunal to determine whether or not overtime is “normally” carried out and whether overtime pay can properly be described as forming part of “normal remuneration” for these purposes. The court did not reach a decision on whether voluntary overtime should have been included in this particular case.
Plumb v Duncan Print Group Ltd   (EAT)  The Working Time Directive does not require workers on sick leave to demonstrate that they are physically unable to take annual leave in order to carry over accrued unused statutory holiday to a subsequent leave year. It is sufficient that they are absent on sick leave and do not choose to take annual leave during that period. However, the EAT also held that the right to carry over leave is not unlimited; the Directive only requires (at most) that workers on sick leave can take annual leave within a period of 18 months of the end of the leave year in which it accrues. The parties have been given leave to appeal to the Court of Appeal.
Data protection
Schrems v Data Protection Commissioner (ECJ) The ECJ gave its preliminary ruling to the Irish High Court that a decision adopted pursuant to Article 25(6) of the Data Protection Directive, like the Commission Decision on the EU-US Safe Harbor framework, does not prevent a national supervisory authority of a member state from examining the claim of a person concerning the protection of his rights and freedoms in regard to the processing of personal data relating to him, which has been transferred from a member state to a third country when that person contends that the law and practices in force in the third country do not ensure an adequate level of protection. The ECJ has also declared Safe Harbor invalid. For more information see our Be Aware alert.
Discrimination
Doran v Department for Work and Pensions (EAT) Employer’s duty to make reasonable adjustments not triggered where such employee had not given any sign she would be returning to work.
Land Registry v Houghton (EAT) An employer discriminated against disabled employees by operating a bonus scheme which did not pay out to employees who had received a warning for high levels of sickness absence, where the warning led to automatic disqualification.
Begum v Pedagogy Auras UK Ltd (EAT) The EAT upheld an employment tribunal’s judgment, that a nursery did not discriminate against a job applicant when it made clear at interview that its uniform policy meant that any garment worn should not present a tripping hazard. This was not a provision, criterion or practice which indirectly discriminated against Muslim women who wore jilbabs (a garment which covers the body from neck to ankle). The nursery allowed women to wear ankle-length jilbabs, so long as they did not present a tripping hazard.
Mbuyi v Newpark Childcare (Shepherds Bush) Ltd (ET) An employment tribunal held that a Christian nursery employee was directly and indirectly discriminated against by her employer on the grounds of her religion or belief when it dismissed her for expressing negative views about a colleague’s homosexuality. However, the employee’s claim of harassment was not upheld because the tribunal found no evidence that the conduct was unwanted by the employee, who welcomed the opportunity to discuss her religious beliefs.
Home Office (UK Border Agency) v Essop and others (CA) The Court of Appeal gave guidance on how a tribunal should approach the requirement in indirect discrimination claims for claimants to show not only group disadvantage caused by application of a provision, criterion or practice (PCP), but also that this caused their personal disadvantage. In doing so, the court disagreed with the EAT’s decision that claimants do not have to prove the reason why they have suffered disadvantage from a PCP.
Metroline Travel Ltd v Stoute UK (EAT) The EAT allowed an appeal against a finding that an employee with Type 2 diabetes was disabled for the purposes of the Equality Act 2010. The employee followed a diabetic diet designed to avoid sugary foods such as fizzy drinks. The tribunal held that this was equivalent of a medical treatment, and that without the treatment, the employee’s condition would meet the definition of a disability. The EAT disagreed, finding that mere abstention from sugary drinks could not be regarded as a “diet” and therefore could not constitute “treatment”. As such, Type 2 diabetes, in itself, does not amount to a disability under the Equality Act 2010.
CHEZ Razpredelenie Bulgaria (ECJ) A person may claim indirect discrimination under the Race Directive even though they do not possess the protected characteristic which has given rise to the discriminatory practice in question. An individual may suffer disadvantage alongside a disadvantaged group without sharing the characteristic of the group. This is contrary to the UK position.   Although the decision relates to the supply of goods and services, it has far-reaching implications for discrimination in an employment context. The concept of “associative discrimination” established after Coleman can no longer be regarded as confined to direct discrimination law. For more information see our Be Aware alert.
Thompson v London Central Bus Company Ltd (EAT) The EAT considered a claim of victimisation based on protected acts performed by a third party. It held that the tribunal had erred in conducting an assessment of the degree of connection or association between the individual and the third party. The appropriate test was whether the employer subjected the claimant to a detriment by reason of the protected acts of others. For more information see our Be Aware alert.
FOA, acting on behalf of Karsten Kaltoft v Billund Kommune (ECJ) The ECJ held that there is no general principle prohibiting discrimination on the grounds of obesity but obesity may fall within the definition of disability if it entails a limitation resulting from long-term physical, mental or psychological impairments which, in interaction with various barriers, hinder a worker’s full and effective participation in their professional life. For more information see our Be Aware alert.
Employment Status
Stack v Ajar-Tec Ltd (CA) A shareholder and director who provided work to a company informally and received no remuneration was an employee.
Employment tribunals
(R (Unison) v Lord Chancellor (CA) The Court of Appeal dismissed the challenge brought by Unison against the introduction of fees in the employment tribunals and the EAT. For more information see our Be Aware alert. Unison has sought permission to appeal to the Supreme Court. In the meantime, a formal review on the impact of tribunal fees by the Ministry of Justice is underway with completion of the review expected later in the year.
Redundancies
USDAW and Wilson (the ‘Woolworths’ case) (ECJ)Lyttle and others v Bluebird UK Bidco 2 Ltd/Cañas v Nexea Gestión Documental SA (ECJ) The ECJ held that “establishment” means the local unit or entity to which the redundant workers are assigned to carry out their duties.
University College Union v University of Stirling (SC) The dismissal of fixed-term employees on expiry of their contracts falls within the definition of redundancy for collective redundancy consultation purposes. While dismissals related to the individual concerned fall outside the ambit of the obligations in TULRCA, these dismissals did not relate to the individual so were within scope. This judgment overturns the Court of Session’s decision, which agreed with the EAT that the dismissals were not for redundancy. As a result of the EAT’s decision, the law in Great Britain (but not Northern Ireland) was amended to expressly exclude employees on fixed-term contracts from collective consultation obligations so the decision is mostly of academic relevance.
United States of America v Nolan (CA) The Supreme Court upheld the decisions of the EAT and Court of Appeal finding that section 188 of TULRCA applied to redundancies at a US military base in the UK. The Court of Appeal had previously ordered a further hearing to determine the key point which arose in the case: whether the obligation to consult collectively arises when an employer is proposing to make a strategic business or operational decision that will foreseeably lead to collective redundancies, or whether that obligation only arises once the employer has made that strategic decision and is proposing consequential redundancies. That issue has now been remitted back to the Court of Appeal.
Territorial scope
Lodge v Dignity & Choice of Dying (EAT) An American citizen employed by a British company who worked remotely in Australia for family reasons was entitled to pursue unfair dismissal and whistleblowing claims in an English employment tribunal.
TUPE
E Ivor Hughes Educational Foundation v Morris and others (EAT) The EAT upheld a tribunal’s decision to make a 90 day protective award in circumstances where no consultation was undertaken because the employer was unaware of its legal obligation to consult. The EAT agreed with the tribunal that there were no special circumstances rendering it not reasonably practicable to comply with consultation requirements. It held that circumstances which may hypothetically have existed, but which were not in fact taken into account by an employer when considering the duty to collectively consult, were not capable of constituting “special circumstances”.
BT Managed Services Ltd v Edwards and another (EAT) An employee who had been off work for six years and had no prospect of returning to work was not “assigned” to an organised grouping for TUPE purposes. The employee’s only connection with the grouping was administrative: he remained “on the books” so that he could continue to receive permanent health insurance.
Unfair dismissal
Ramphal v Department for Transport (EAT) The EAT allowed an appeal against the decision of an employment judge that an employee had been fairly dismissed in circumstances where the investigating officer’s recommendations had been heavily influenced by input from HR. The investigating officer’s report originally recommended a finding of misconduct and a sanction of a written warning, but after numerous comments and amendments by HR, the final report found the employee to have committed gross misconduct, and recommended immediate dismissal. HR’s advice should be limited essentially to matters of law and procedure, as opposed to questions of culpability, which are reserved for the investigating officer.
Whistleblowing
Underwood v Wincanton plc (EAT)       A dispute between an employer and a group of four employees relating to their terms and conditions of employment was capable of being a protected disclosure, entitling them to seek protection against unfair dismissal under whistleblowing legislation. The employees had raised a collective complaint regarding the allocation of overtime. The EAT overturned a tribunal’s decision to strike out the claim and held that a dispute between employer and employee as to terms of employment is a matter capable of being in the public interest. For more information see our Be Aware alert
Working time
Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL (ECJ) The ECJ followed the Advocate General’s opinion by finding that the time spent by workers, who do not have a fixed or habitual place of work, on travelling each day between their homes and the premises of the first and last customers designated by their employer is “working time” for the purposes of the Working Time Directive. For more information see our Be Aware alert.

 

 

2016 LEGISLATION ON THE HORIZON
Apprenticeships
The Enterprise Bill will regulate use of the word “apprenticeship” to cover only government-accredited schemes and increase the number of public sector apprenticeships offered.An apprenticeship levy of 0.5% of payroll will be imposed on employers with an annual pay bill of more than £3 million but not until April 2017.
Equal pay
Mandatory gender pay gap reporting to be introduced. The Equality Act 2010 contains a power for the Government to introduce regulations which require employers of 250 or more employees to publish information showing whether there are differences in the pay of their male and female employees. In July 2015, the Government consulted on its proposals to introduce these regulations. The consultation closed in September 2015, and a response is expected imminently.The Government sought views on how the gender pay gap should be reported. It suggested, by way of example:

  • One overall gender pay gap figure that captures the difference between the average earnings of men and women as a percentage of men’s earnings;
  • Calculating separate gender pay gap figures for full-time and part-time employees;
  • Showing the difference in average earnings of men and women by grade or job type.

The Government also sought views on the frequency of reporting (which will be no more than annual) and on where the information should be published.

Rates and limits
National minimum wage

As part of the July 2015 Budget, the government announced that it would introduce a premium, over and above the NMW, for workers aged 25 and over. This is known as the National Living Wage. The government will set the first premium in April 2016 at 50p which will effectively result in a higher NMW of £7.20 for older workers.

SMP and other statutory payments

The Department for Work and Pensions has published proposed benefit and pension rates for the tax year beginning on 6 April 2016, including figures for Statutory Maternity, Paternity, Adoption and Shared Parental Pay, Maternity Allowance, and Statutory Sick Pay. Because of a 0.1% fall in CPI in the year to September 2015, there will be no increase to those payments (or the qualifying earnings thresholds) for 2016-17 and so the figures will remain the same as the current tax year.

Scottish devolution
The Scotland Bill 2015-16 will amend the Scotland Act 1998 and devolve various powers to the Scottish Parliament, including in relation to the administration and management of employment tribunals. The devolved powers will be limited to ensure that consistency in the practice and procedure between the Scottish tribunals and the tribunals in England and Wales is maintained, but it will potentially give the Scottish Parliament power to change tribunal funding or abolish tribunal fees altogether.
Termination payments
The Government is proposing substantial changes to the tax treatment of payments made on termination of employment. The key parts are:

  • Removal of the distinction between contractual and non-contractual payments – all payments will be taxable, subject to specific exemptions;
  • Alignment of the tax and NIC treatment; and
  • Getting rid of the £30,000 tax free allowance.
The Enterprise Bill will also impose a £95,000 cap on exit payments made to public sector workers.
Trade unions
The Trade Union Bill aims to reform various aspects of the law on industrial action and trade union obligations and activities. The proposed reforms include increasing ballot thresholds, extending the notice of industrial action required to be given to employers, introducing time limits on ballots and changes to facility time. The Bill would also introduce more stringent requirements for unions to supervise picketing. The Government is also proposing to remove Regulation 7 from the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which prevents employers hiring agency staff during industrial action. The Bill is currently before the House of Lords.
Zero hours contracts
The draft Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 were laid before Parliament in October 2015. The Regulations will give employees the right not to be unfairly dismissed or subjected to a detriment because they have breached a provision or purported provision of the zero hours contract to which section 27A(3)(1) of the Employment Rights Act 1996 applies – ie a provision which prohibits the worker from doing  work or performing services under another contract or arrangement.  Zero hours contracts are defined under the ERA as a contract of employment or other worker’s contract under which (a) the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker and (b) there is no certainty that any such work or services will be made available to the worker. There will be no qualifying period for the unfair dismissal claim. The Regulations will come into force 28 days after they are made – so the commencement date is not yet known.
Human Rights Act
On 17 October 2015, the Independent newspaper reported that the government intends to proceed with its introduction of a British Bill of Rights to replace the Human Rights Act 1998. A 12-week consultation is expected to start in December 2015 with a view to the new law receiving Royal Assent by the summer of 2016.

 

 

2016 CASES ON THE HORIZON
Annual leave
Lock v British Gas Trading Ltd (EAT) The EAT will hear the appeal on 8 and 9 December on whether the WTR can be read to provide that the calculation of statutory holiday pay includes commission where that forms part of a worker’s remuneration. Judgment is expected in early 2016.
Atypical workers
Moran and others v Ideal Cleaning Services Ltd and another (CA)  Whether the Agency Workers Regulations 2010 apply to a group of agency workers who were assigned to one hirer for periods ranging between six and 25 years.To float on 2 or 3 March 2016
Collective employee relations
British Airline Pilots’ Association v Jet2.com Ltd (CA) Whether an airline, on which the specified method of collective bargaining had been imposed by the CAC, was not required to negotiate with a recognised trade union over pilots’ rostering arrangements. To float on 9 or 10 November 2016.
R (Boots Management Services Ltd) v Central Arbitration Committee and others (CA) Whether the statutory union recognition scheme in Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992 is incompatible with the Human Rights Act 1998. To float on 22 or 23 November 2016.
Discrimination
Hainsworth v Ministry of Defence (Supreme Court) Can a reasonable adjustments claim be advanced by an employee who is not herself disabled, but is associated with someone who is disabled, in circumstances where the adjustment sought would enable the associated person with disabilities to undergo training/education?
Griffiths v Secretary of State for Work and Pensions (CA)  Whether the reasonable adjustments duty arises where a sickness absence procedure contained discretionary provisions which were more favourable to disabled employees. Judgment reserved on 22 September 2015
Whistleblowing
Chesterton Global Ltd (t/a Chestertons) v Nurmohamed (CA)  Appeal from the EAT which held that it is not necessary to show that a disclosure was of interest to the public as a whole, as only a section of the public will be directly affected by any given disclosure and that a small group may be sufficient. To float on 11 or 12 October 2016.

 

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/be-aware-review-of-the-year-2015/

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/

Gender pay gap consultation published

Clare Gregory, a Partner in our Sheffield office, comments: The Government has today published an initial consultation on legislation which will implement gender pay gap reporting for organisations with 250 or more employees.

The requirement to publish gender pay data has had a complicated legislative history. Section 78 of the Equality Act 2010 introduced a power to make Regulations requiring employers to publish information relating to the pay of employees for the purpose of showing whether there is a difference in pay between male and female employees. However, s.78 was not brought into force. Towards the end of the last Parliament a late amendment to the Small Business, Enterprise and Employment Act 2015 included a provision requiring Regulations under s.78 to be made within 12 months of that Act coming into force; however, that provision was also not brought into force. In the meantime, the Coalition Government introduced a voluntary pay data reporting initiative, ‘Think, Act, Report’, but since its launch in 2011 only 5 companies have published pay details.

The Government is now proposing to introduce Regulations under s.78 which will require employers in the private and voluntary sectors in Great Britain with at least 250 employees to publish information about the pay of their male and female employees. A person will be considered an employee if they are employed under a contract of employment, a contract of apprenticeship or a contract personally to do work. This encompasses employees, workers and a wider category of individuals who are self-employed, provided that their contract obliges them to perform the work personally: ie if they are not permitted to sub-contract any part of the work or employ their own staff to do it. The new reporting requirements will not apply to most public authorities who are required to comply with the public sector equality duty and, therefore, already have broader equality obligations than most other employers.

The Government is consulting on what form of reporting will be required. Options include an overall gender pay gap figure measured by calculating the difference in earnings between all men and all women employed by the organisation, gender pay gap figures broken down by full-time and part-time employees and gender pay gap figures broken down by grade or job type.  The metrics chosen will be crucial; the overall pay gap figure in most organisations will be largely meaningless as it can be disproportionately affected by a small number of high earners. A requirement to break the data down by grade or job title is much more likely to highlight an equal pay problem and therefore expose employers to the risk of equal pay claims, but there are likely to be significant difficulties in how to define grade or job type.

The Government is also consulting on whether any additional narrative information should be required, for example explaining any pay gap and setting out what remedial action the employer plans to take.

Reporting will not be required more frequently than once every 12 months but the consultation seeks views on whether it should be required less frequently.

It is expected that the new Regulations will be made during the first half of 2016, but commencement is likely to be delayed to give businesses an opportunity to prepare for implementation, and may be on a phased basis affecting the largest organisations first. Nearly 8,000 employers will be required to report some information about pay data when the Regulations are implemented.

A copy of the consultation paper ‘Closing the gender pay gap’ can be accessed here. The consultation closes on 6 September 2015.

It is questionable how successful the proposed legislation is likely to be in its stated aim of closing the gender pay gap. The overall UK gender pay gap stands at 19.1%, although the gap for full-time employees has narrowed to 9.4%. The causes of the gender pay gap are complex and multi-factoral.  Female part-time employees are paid more than their male counterparts but as part-time work is often low-paid and a higher proportion of women than men work part-time, this continues to have a significant impact on the overall gap. Women are still concentrated in lower paid occupations such as caring whereas many of the highest paid sectors are disproportionately made up of male employees.

Employers may wish to get their houses in order before being exposed to public scrutiny. Employers who will be affected by the proposed Regulations can use the lead in period before implementation to conduct an audit of pay arrangements to identify potential problem areas and help the organisation to manage and present information meaningfully and in context.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/gender-pay-gap-consultation-published/

2014 Review of the year

Sandra Wallace, Partner and UK Employment Group Head, highlights the most important legislative and case law developments from 2014 and identifies the key cases to watch out for in 2015.

 

2014 LEGISLATION ROUND UP
Employment tribunals
6 April 2014 Cap on a week’s pay increased from £450 to £464.
Unfair dismissal compensatory award increased from £74,200 to £76,574 (or 52 weeks’ pay whichever is the lower).
Early conciliation rules came into force requiring all claimant employees to obtain an early conciliation certificate from ACAS before being able to lodge a claim in the employment tribunal.
The power came into force allowing an employment tribunal to order an employer to pay a financial penalty where it has found that the employer has breached a worker’s rights and there are aggravating factors.
TUPE
31 January 2014 Regulations came into force amending TUPE in a number of key respects including extending the timeframe for notification of employee liability information, allowing renegotiation of terms derived from collective agreements one year after the transfer, allowing pre-transfer consultation to count for collective redundancy purposes and allowing changes in the location of the workforce to fall within the ETO defence.
Zero hours contracts
25 June 2014 The Small Business Enterprise and Employment Bill was published setting out provisions banning exclusivity clauses in zero hours contracts.
Family friendly
30 June 2014 The right to request flexible working arrangements was extended to all employees.
1 October 2014 A new right to unpaid time off for fathers/partners to attend antenatal appointments was introduced.
1 December 2014 A new system of shared parental leave was introduced which applies to parents expecting a baby, or matched for adoption, on or after 5 April 2015. It allows employees to share up to 50 weeks of leave.
Discrimination
6 April 2014 The Government repealed the statutory questionnaire process.
Equal pay
1 October 2014 Regulations came into force allowing a tribunal to order an employer to carry out an equal pay audit in prescribed circumstances where the tribunal finds the employer has discriminated because of sex in relation to contractual or non-contractual pay.
Whistleblowing
June 2014 The Government published its response to its call for evidence on further changes to the whistleblowing framework.

 

2014 CASE LAW ROUND UP
Annual leave
Lock v British Gas Trading Ltd (ECJ) The calculation of statutory holiday pay must include commission where that forms part of a worker’s remuneration. The case will continue in the employment tribunal in 2015 (see below).
Bear Scotland Ltd and others v Fulton and others (EAT) Payments for overtime which a worker is required to work but which an employer is not required to offer forms part of ‘normal remuneration’ and must therefore be taken into account for the calculation of statutory holiday pay.  However, workers can only bring retrospective claims in respect of underpaid holiday where there is less than three months between each underpayment of statutory holiday pay.
Bollacke v K + K Klaas & Kock BV & Co KG The estate of a deceased worker is entitled to a payment in lieu of accrued but untaken statutory annual leave at the time of the worker’s death.
Employment status
Clyde & Co LLP and another v Bates van Winkelhof (SC) An equity partner in a limited liability partnership is a ‘worker’ and eligible to bring a whistleblowing claim.
Illegality
Hounga v Allen (nee Aboyade-Cole and another (SC) An employee can pursue a claim for race discrimination notwithstanding that they have entered the UK dishonestly and have no right to work in this country.
Restraints of trade
Sunrise Brokers LLP v  Rodgers (CA) An injunction was upheld which bound an employee to his employer for six months of his notice period without pay, then prevented him from working for a competitor for a further four months, again without pay. The employee was not entitled to pay unless he was ready and willing to work, and the employer was entitled to refuse to accept the employee’s purported termination in repudiatory breach of contract.
Prophet plc v Huggett (CA) Words could not be read into a non-compete covenant to make sense of the covenant.  This meant that the protection afforded by the covenant was worthless.
Discrimination
Shuter v Ford Motor Company Ltd (ET) The correct comparator for direct discrimination purposes, where it is alleged that a non-enhanced additional paternity pay scheme discriminates again a male employee, is a female employee entitled to additional paternity leave.
Sefton Borough Council v Wainwright (EAT) The duty to offer a woman on maternity leave a suitable alternative vacancy in a redundancy situation arises when the employer becomes aware that her role is redundant or potentially redundant.
Territorial scope
Fuller v United Healthcare Services Inc and another (EAT) A US citizen employed by a US company who spent approximately 49% of his time working in the UK did not fall within the territorial scope of the Employment Rights Act 1996 and Equality Act 2010.

 

2015 CASES ON THE HORIZON
Annual leave
Lock v British Gas Trading Ltd (ET) Whether the WTR can be read to provide that the calculation of statutory holiday pay includes commission where that forms part of a worker’s remuneration.
Employment tribunals
R (Unison) v Lord Chancellor and another (HC) Whether new evidence submitted by UNISON is sufficient to successfully challenge the introduction of employment tribunal fees.
Redundancies
Lyttle and others v Bluebird UK Bidco 2 Ltd (ECJ) Meaning of the term ‘establishment’ and whether the duty to collectively consult arises when 20 or more employees are proposed to be dismissed at a single establishment, or  when there are 20 or more across the whole of the employer’s business.
USDAW and Wilson (the ‘Woolworths’ case) (ECJ) Whether the words ‘at one establishment’ in TULCRA 1992 are to be  disregarded for the purposes of any collective redundancy involving 20 or more employees.
University College Union v University of Stirling (SC) Whether fixed-term employees were dismissed on expiry of their contracts for a ‘reason relating to them as individuals’, rather than ‘redundancy’ with the effect that was no duty to collectively consult.
United States of America v Nolan (CA) Whether the obligation to consult arises when an employer is proposing to make a strategic business or operational decision that will foreseeably lead to collective redundancies, or only once the employer has made that strategic decision and is proposing consequential redundancies.
Discrimination
FOA, acting on behalf of Karsten Kaltoft v Billund Kommune (ECJ) Whether discrimination on grounds of obesity is prohibited by EU law.

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