Archive for the ‘Employment’ Category

General Election 2017 – Party Employment Law Proposals & Changes

Thursday, June 1st, 2017

Theresa May’s announcement in April explaining that there would be a snap general election on 8 June surprised many. It isn’t all about Brexit and many will be pleased to learn that employment law proposals feature in many of the political parties’ manifestos, many focusing on an extension of worker’s rights. It is therefore appropriate and timely to have a look at the main parties’ individual employment law proposals as set out in their respective manifestos.

Conservatives

  • To ensure that the interests of workers and the self-employed are properly protected in the UK’s wider ‘Gig’ economy and focusing on the recent Taylor report proposals;
  • To enable all employees to have unpaid time off for training, to care for sick relatives and to deal with child bereavement;
  • To limit executive pay to annual votes by shareholders and to require listed companies to publish the ratio of executive pay to that of the broader UK workforce;
  • A commitment to increasing the National Living Wage to 60% of average earnings by 2020. Thereafter to keep up with the retail price index;
  • To enable tax breaks of up to a year on Employer national insurance contributions relating to new employees with disabilities, mental health issues and those with long term unemployment histories;
  • To increase the immigration skills charge levied on businesses employing migrant workers from £1,000 to £2,000 by 2022;
  • Extended Equality Act protections against workplace discrimination to mental health conditions that are ‘episodic and fluctuating;
  • Increased gender pay gap reporting requirements on larger employers and to introduce pay gap reporting obligations in relation to ethnic minority employees; and
  • The possibility of introducing a British bill of rights that might affect employment law and the right of workers.

 

Labour

  • The establishment of a Ministry of Labour whose task will be to oversee the enforcement of workers’ rights;
  • A complete ban on zero hours contracts and unpaid internships;
  • A commitment to doubling paid paternity leave to 4 weeks and to increase paternity pay;
  • To include ‘terminal illnesses’ as a new protected characteristic for the purpose of establishing discrimination at work and to amend the Equality Act 2010;
  • Strengthen the protection of women against unfair redundancy relating to maternity and parental commitments;
  • To protect workers in the Gig economy by placing the burden of proof onto the employer to prove that an individual worker is not an employee in circumstances where worker status is in dispute;
  • The introduction of maximise pay gap rules for public sector employees and those who private sector employees who perform public sector contracts. The proposal is a maximum pay differential of 20:1 between the highest and the lowest paid earners;
  • To abolish employment tribunal fees;
  • To remove the public sector pay cap currently 1%;
  • To repeal the Trade Union Act 2016 which increased balloting numbers and restricted trade union activities;
  • To expand workplace collective bargaining rights;
  • To ensure trade unions can access all work places and enforce worker’s rights and to roll out the right to trade union membership at work;
  • Public sector contracts to be awarded only to businesses that formally recognise trade unions; and
  • Preventing overseas only recruitment practices and cracking down on employers who fail to pay migrant workers the National minimum and Living wage.

 

Liberal Democrats

  • A commitment to banning zero hour contracts and the right to request fixed term contracts;
  • The use of external enforcement agencies to strengthen the enforcement of existing employment contracts;
  • Giving all workers paternity and shared parental leave from the commencement of employment;
  • Extending paternity leave to fathers by an additional month;
  • Extending the pay gap reporting provisions to cover national living wage compliance, and the gaps between the top and average rates of pay within a business;
  • Include additional requirements under the Equality Act 2010 that large employers publish data on gender, black and minority ethnic and lesbian gay bisexual and transgender employment levels and pay gaps;
  • Guaranteeing the freedom to wear religious or cultural dress in the workplace;
  • Outlawing caste discrimination and extending discrimination law to protect gender identity and expression;
  • Implement worker participation in company decision making by having mandatory staff representation on remuneration committees and at board level;
  • Abolish employment tribunal fees; and
  • Protecting workers rights in the UK’s Gig economy.

 

Green Party

  • The introduction of a mandatory 4 day working week or a maximum of 35 hours per week;
  • Abolish zero hour contracts;
  • Increase in the National Minimum Wage to £10 per hour by 2020;
  • Introducing a universal basic income with a pilot scheme along the lines recently trialled in Finland guaranteeing a non means tested basic wage;
  • To end gender pay gaps; and
  • To ensure that there is 40% representation of women on all public company and public sector boards.

 

Scottish National Party (SNP)

  • An increase in the National Minimum Wage to the level of the Real Living Wage to over £10 by 2022;
  • No increase in income tax or national insurance for the low paid;
  • A UK wide increase in income tax from 45p to 50p; and
  • A doubling in the employment allowance which provides a national insurance discount for job creation.

 

If you would like to find out more, please call Steven Eckett, our employment solicitor, on 020 7998 7777  or email him at steven.eckett@bloomsbury-law.com.

EMPLOYMENT SERVICES

Employment Law Update – April 2017

Tuesday, May 2nd, 2017

Report from Work and Pensions Committee condemns bogus self-employment practices in the Gig Economy

The Work and Pensions Committee has published a report suggesting that the Government must stop ‘bogus’ self-employment practices, which are potentially creating an extra burden on the welfare state whilst also reducing tax contributions to HMRC.

As part of the investigation the Committee heard from representatives from some of the major players in the Gig Economy such as Uber, Amazon and Deliveroo, and also from some of the individuals working for them.

The Chair of the Committee Frank Field said “This inquiry has convinced me of the need to offer ‘worker’ status to the drivers who work with those companies as the default option…….This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as ‘self-employed’ or ‘employed’.”

Some of the main findings of the Committee are: –

  1. Designating workers as self-employed because their contract offers none of the benefits of employment puts ‘cart before horse’. Companies propagate the myth of self-employment, one which frequently fails to stand up in Court.

 

  1. Where there are tax advantages to both workers and businesses in opting for a self-employed contractor arrangement, there is little to stand in the way.

 

  1. An assumption of the employment status of ‘worker’ by default rather than ‘self-employed’ by default, would protect both those workers and the public purse.

 

  1. The self-employed and employees receive almost equal access to services funded by national insurance, yet the self-employed contribute far less. The incoming Government should develop a roadmap to equalise employee and self-employed national insurance contributions.

 

  1. The Department of Work and Pensions needs to ensure that its resources reflect the positive contribution that self-employment can make to society and the economy. This may require an expansion of specialist support in job centres.

 

The Committee also acknowledged that self-employment can be genuinely flexible and rewarding for many although employees and workers can and do work flexibly and that the main motive for classing designated workers as self-employed by these businesses is profit. Essentially these businesses get all of the benefits whilst workers take on all of the risk and the state expected to pick up the tab.

The Committee has strongly suggested that ‘It is up to the Government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide ranging reform to the regulation of corporate behaviour.

The Government has already signalled its intention to tighten up the law in this area and we can expect new legislation in the event that a new conservative government is re-elected next month. This might also form part of some of the other political party’s election manifestos which are scheduled to be published imminently.

In the meantime, Uber has been granted leave to appeal last October’s employment tribunal first instance decision.

 

Employment Tribunal awards £2 to Claimant who was denied a companion at a disciplinary appeal hearing

In Gnahoua -v- Abellio London Limited, the employment tribunal held that the employer breached the Claimant’s right to be accompanied when it refused to allow his chosen companions to accompany him at a disciplinary appeal hearing.

The Claimant who was a bus driver was originally dismissed from his employment when he was caught looking at his iPad whilst driving.

As part of the appeal process the Claimant informed his former employer that he wished to be accompanied by 2 brothers who had formed the PTSC Trade Union of which the Claimant had become a member.

The employer however refused to allow the Claimant to be accompanied by these two brothers on the basis that it had previously banned both brothers from representing staff at its internal hearings. The employer’s reasons were that one of the brothers used threatening behaviour towards members of staff and that both brothers were dishonest.

Ultimately the Claimant attended the appeal hearing unaccompanied and without representation. The employer upheld its decision to dismiss the Claimant.

The employment tribunal accepted that the employer had technically breached the Claimant’s right to be accompanied at the appeal hearing.

However, the employment tribunal went on to award a nominal sum of £2 on the basis that the employer had strong grounds for being unhappy with the choice of companion.

This case serves as a useful reminder that employers should always allow employees the right to be accompanied at internal disciplinary and appeal hearings by either a work colleague or a trade union representative, and that they ought not to unreasonably refuse the choice of companion selected by an employee.

Please call Steven Eckett, our employment solicitor, on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

EMPLOYMENT SERVICES

Employment Law Update – March 2017

Friday, March 31st, 2017

There are a number of new employment law developments and changes coming into force in April 2017.  Let’s take a look at some of them:

  • Gender Pay Gap reporting

New laws become effective from April 2017 affecting larger employers with 250 or more employees. These organisations will have to produce data about their gender pay gap, which also includes data about bonuses. There is also a duty to report on the proportion of male and female employees in different pay quartiles including bonus details. Pay data must be based on a snapshot of pay data on all employees every April commencing in April 2017. Organisations in the public sector must use 31 March as their relevant snapshot date every year. Gender Pay Gap details must be disclosed on the Employer’s website within a period of 12 months. There is also a further duty to upload this data to a Government website.

  • Increases to the National Minimum and Living Wage

The National Living Wage affecting employees aged 25 and over increases from £7.20 an hour to £7.50 effective from 1 April 2017.

There are also additional new rates to the National Minimum Wage affecting other age brackets as follows: –

  1. £3.50 for apprentices under 19 or 19 or over who are in the first year of an apprenticeship.
  2. £4.05 per hour – 16-17 yrs old
  3. £5.60 per hour – 18-20 yrs old
  4. £7.05 per hour – 21-24 yrs old

 

  • Changes to salary-sacrifice schemes

On 6 April 2017, various benefits in kind which currently attract income tax and national insurance advantages when provided under a salary-sacrifice scheme are to be limited. The Chancellor of the Exchequer announced these changes last year as part of his Autumn Statement. The changes are likely to affect benefits such as gym membership, mobile phone contracts and health checks that are offered as part of a salary-sacrifice scheme. No changes however will be made to child care, pensions savings and cycle to work schemes which will continue to be exempt. Arrangements made before 2017 will be protected until April 2018. Arrangements for cars, accommodation and school fees will be protected until April 2021. The rationale behind these changes is that the Government believes that the growth in these schemes is impacting on lost income tax and national insurance contributions.

  • New Apprenticeship Levy introduced

The Government’s apprenticeship levy to fund and promote apprenticeship training as an alternative to full time further education is coming into force on 6 April 2017. All employers who have a payroll bill in excess of £3 million will have to pay a monthly levy. Small employers that do not have to pay the new levy will be able to access funding for apprenticeships and this new system of funding is expected to start from May 2017.

  • New Immigration Laws

From 6 April 2017 employers that sponsor skilled workers under Tier 2 of the immigration points based system will now have to pay a levy of £1,000 for each sponsorship. Small employers and charities will only have to pay £364. In addition, workers arriving in the UK under Tier 2 for positions in education, social care and healthcare must now obtain criminal record certificates from the countries that they have resided in for the past ten years. The Tier 2 salary threshold is also increasing to £30,000.

From 6 April 2017, a weeks’ pay for the purposes of calculating statutory redundancy pay increases from £479 to £489. The maximum basic award increases from £14,370 to £14,760 and the maximum compensatory award increases from £78,962 to £80,541.

  • Increases to statutory maternity, paternity, adoption, shared parental leave and statutory sick pay

From 2 April 2017, statutory maternity, paternity, adoption and shared parental leave weekly rates increase from £139.58 to £140.98. From 6 April 2017, statutory sick pay weekly rates increase from £88.45 to £89.35.

New developments affecting worker status

There have recently been further case law developments on the status of workers in the so called ‘Gig economy’. In Boxer -v- Excel Group Services Ltd (in liquidation) an employment tribunal has ruled that a cycle courier who was labelled as a contractor was in fact a worker. This entitled him to various employment rights including the right to holiday pay, statutory sick pay and the national living/minimum wage. The employment tribunal held that the arrangements in place and the contract signed by the parties did not reflect the reality of the situation. The main influencing factor for the employment tribunal was that Excel controlled Mr Boxer and the lack of bargaining power that he had when signing his contract that labelled him as a contractor. It is likely that we will see more developments where these arrangements are being challenged. The Government is also likely to legislate at some point in the near future to promote employment rights for individuals working in this new economy.

Please call Steven Eckett, our employment solicitor, on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

EMPLOYMENT SERVICES

Employment Law Update – January 2017

Wednesday, February 1st, 2017

2017 looks like a busy year for UK employment law both in terms of legislative changes and case law developments.  Here is a snap-shot of some of the major changes that can be expected: –

Gender Pay Gap Reporting

The Regulations are due to come into force on 6 April 2017 and affect private sector organisations with 250 or more employees.

ACAS and the Government Equalities Office have also published guidance on how businesses can calculate and report their gender pay gap in their organisation.

A revised version of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 was published in December 2016. All organisations must publish a snapshot of salaries and bonuses across 6 key metrics and publish information on their website about their gender pay gap within 12 months of the Regulations coming into force and then annually thereafter.

Public sector Regulations are also being introduced as part of the existing public-sector equality duty.

Holiday Pay

The case of British Gas -v- Lock is being appealed to the Supreme Court and British Gas are hoping to overturn the Court of Appeal’s decision which held that holiday pay should include commission payments.   This authority is also in line with recent developments which held that regular overtime payments also needs to be included in the calculation of holiday pay.

It is also clear that European Union case law supports these developments and for now the UK remains a member of the European Union, notwithstanding BREXIT.  Consequently, the UK remains bound by any European rulings until we have formally left the European Union currently suggested for 2019.

Salary Sacrifice Schemes

This follows on from last year’s Autumn Statement where it was announced that there would be changes to the tax status of some salary sacrifice benefits with effect from April 2017.  This will mean that some benefits will no longer benefit from tax exemptions under the banner of salary sacrifice for example cars, accommodation and school fees and other benefits in kind.   However, pensions, childcare vouchers and cycle to work schemes will continue to be exempt from tax under the new salary sacrifice rules.

Apprenticeships

New rules come into effect on 6 April 2017 whereby the Government is introducing its anticipated annual apprenticeship levy.   The new rules will apply to all employers in the UK with a salary outlay of £3 million or more.   The levy will be charged at the rate of 0.5% of the total salary bill.   An annual allowance of £15,000 can also be offset against the levy.   The aim of the legislation is to promote apprenticeships for young people and to increase their number for those employers that have salary levels below £3 million.   It is being promoted as an alternative to full time further education and to promote training and skills for young people.

Worker Status in the Gig economy

Following on from last year’s landmark Uber judgment ruling that taxi drivers were workers entitling them to various employment rights there has been another successful challenge his time in the courier sector.   An employment tribunal at first instance held that a CitySprint courier was also a worker and not self-employed.   Further challenges are expected this year, and also the appeal from Uber, along with Government proposals to introduce new employment laws to cater for the growing Gig economy and 21st century ways of working.

Case law developments:

Creighton -v- Together Housing Association Limited

This employment tribunal decision related to a long serving employee who was dismissed by his employer because he made derogatory comments about his colleagues and his employer on Twitter for up to three years.

The employment tribunal held that the dismissal for gross misconduct following a disciplinary investigation and hearing was a potentially fair reason relating to his conduct.

This authority demonstrates once again that it is vitally important that employers not only have an effective social media policy in place that is regularly brought to the attention of employees but that employers are consistent in applying it to all employees.

Call Steven Eckett, our employment solicitor on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

Prime Minister Confirms Protection Of Workers’ Rights

Tuesday, November 1st, 2016

Prime Minister Theresa May has at the start of the Conservative Party Conference given hope to many workers in the UK that current employment laws will be protected, and that new ones will be implemented to reflect modern-day work practices.

Firstly in debating the continuing saga of Brexit the Prime Minister has now confirmed that a Great Repeal Bill will form part of the next Queen’s speech which will ultimately repeal the European Communities Act 1972.  This is the act that many complain has led to the erosion of UK sovereignty and independence over time.

Once the European Communities Act 1972 has been repealed it is envisaged that all current EU laws including EU derived employment laws will become part of UK domestic law and in turn the government is then free to retain or repeal those laws as it sees fit. The European Court of Justice will also no longer have the overall say on our laws and the British courts will be completely sovereign.

In a new development the Prime Minister has also appointed Matthew Taylor, a former policy chief working under former Prime Minister Tony Blair to review and to look at how to extend worker’s rights in the so called ‘gig’ economy.

In her own words, the Prime Minister has said that she wants to be ‘certain that employment regulation and practices are keeping pace with the changing world of work’ which includes the growth in part-time working and the use of self-employed contractors by for example Uber and Deliveroo.

The concern as is evidenced by two test cases this summer, is that many of these self-employed contractors are not eligible for the most basic of legal rights for example the national minimum or living wage, statutory sick pay, and statutory holiday and maternity pay. The judgments of these two test cases is due to be issued by the Employment Tribunal this autumn.

This review will also focus on zero-hours contracts which are increasing in number and which thanks to companies like Sports Direct have received some very unwelcome publicity and cause for concern.

At a time when worker’s rights were thought to be at risk following Brexit it now seems that the Government is keen to protect and in some instances extend those rights. The devil of course is always in the detail and we will need to await further announcements from the Government as to which specific rights will be protected or extended and which new rights will be introduced.

Call Steven Eckett, our employment solicitor on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

National Minimum Wage Change

Friday, September 30th, 2016

The National Minimum Wage will increase on 1 October 2016 in line with the Low Pay Commission’s recommendations.

Legislation in the form of the National Minimum Wage (Amendment) (No2) Regulations will increase the payments as follows:

  • Workers aged between 21 and under 25 – The hourly rate rises from £6.70 to £6.95
  • Workers aged between 18 and 21 – The hourly rate rises from £5.30 to £5.55
  • Workers aged 16 and 17 – The hourly rate rises from £3.87 to £4.00
  • The Apprentice hourly rate rises from £3.30 to £3.40

Remember that the National Minimum Wage rates are separate from the National Living Wage which is relevant to all workers aged 25 and over, and where the hourly rate is currently set at £7.20.

The Low pay Commission is yet to report on an increase in the National Living Wage for 2017. However, the aim is to bring the National Living Wage level up to £9.00 per hour by 2020 and by the end of the current Parliament. Many argue that the increase is not enough, while others argue that setting higher minimum wages would lead to fewer job opportunities.

These measures must be implemented and it is recommended that all payroll systems are updated to ensure that there are no breaches of these Regulations. There are now greater powers to name and shame businesses who fail to pay these rates combined with more punitive enforcement measures.

Call Steven Eckett, our employment solicitor on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

Employment Law Update – August 2016

Thursday, September 1st, 2016

Rise in women on maternity leave facing discrimination

A survey by Citizens Advice reports a 60% rise in women reporting that they have been the victim of discrimination at work when they take maternity leave. Poor practices from employers include reducing hours of work, placing staff on zero hour’s contracts, changing roles when returning to work and making their roles redundant. Citizens Advice believes that the introduction of fees in the employment tribunal, combined with the rise in zero hours contracts, agency work and multiple part-time jobs, makes employees more vulnerable to these types of discriminatory practice when it comes to maternity rights. The research also estimates that around 54,000 new mothers are losing their jobs across the UK every year which is twice the number compared to a similar survey in 2005. It also found that 10% of women were discouraged from attending ante-natal appointments by their employers, which of course is unlawful and a serious health and safety issue.

 

Deliveroo bans workers’ access to the Employment Tribunal

Independent Contractors at restaurant delivery firm Deliveroo are being told in their terms and conditions that they cannot issue legal proceedings to be recognised as an employee or a worker. One provision stipulates ‘You further warrant that neither you nor anyone acting on your behalf will present any claim in the employment tribunal or civil court in which it is contended that you are either an employee or a worker’ and that they must ‘indemnify and keep indemnified Deliveroo against costs (including legal costs) and expenses that it incurs.’

Fortunately these types of penalty clause are unenforceable and are not worth the paper that they are written on. They are designed to scare and discourage delivery drivers from following in the footsteps of staff at Uber who have brought proceedings in the employment tribunal in relation to their employment status.

 

Employer successfully enforces Restrictive Covenants against Former Employee

The High Court recently awarded damages of £30,000 and an injunction to a business after a former employee breached his restrictive covenants by poaching his former employer’s clients.

The former employee Mr Penfold was employed by Decorus as a sales account manager from 2012. He signed a contract of employment which included restrictive covenants that were too widely drafted. Decorus at a later stage introduced updated contracts of employment including narrower restrictive covenants with a shorter restricted period of 6 months which Mr Penfold signed. He had also received a pay-rise before the new contract was introduced following an appraisal.

Mr Penfold tried to argue that the pay-rise issued before he signed the new contract of employment could not be counted as consideration to bind him into the new restrictive covenants.

In contrast Docorus argued that the introduction of the new contract was part of a three-phase process, namely the appraisal, follow up actions for example the pay-rise and then the issuing of the new contract of employment with the revised restrictive covenants.

In January 2016 Mr Penfold resigned and set up his own business. He then attempted to poach the clients of Decourus by using his access to their purchase logs which contained highly confidential and commercially sensitive information. He also entered into an agreement with one of Decorus’s customers whilst still employed by them, to ensure that this client provided him with information about their dealings with Decorus so that he could undercut and compete against them.

The High Court held that when taken together the appraisal, pay-rise and new contract were all connected and were valid consideration and that Mr Penfold had breached his duty of fidelity to Decorus.

This case illustrates that it is important for Employers to set out clear restrictive covenants at the start of the employment relationship and that they need to regularly review their restrictive covenants when the employee is promoted to ensure that they are appropriate and protect the business. It is also important to introduce updated restrictive covenants at the time of any promotion and/or pay-rise and to make it clear that the promotion and/or pay-rise is conditional on the employee accepting the new restrictive covenants and signing to this effect.

(Decorus Limited v (1) Daniel Penfold (2) Procure Store Limited [2016] EWHC 1421 (QB))

 

Employee awarded £3,000 damages after Employer withdraws job offer

The Employment Tribunal has awarded a Claimant damages for breach of contract where he verbally accepted a job offer for the position of maintenance engineer made by a recruitment agency hired to act on its behalf, and where the employer subsequently withdrew the offer.

The Employment Tribunal held that the employer acting through its agency had verbally offered the job to the Employee, which he had then accepted and which created a contract of employment. This was even though the salary and start date had not been agreed.

It was also held that the employee was entitled to damages for breach of contract equivalent to one month’s salary in lieu of notice. This was on the basis that one month was a reasonable period of notice for the position.

This case illustrates that it is vital that employers are clear that they wish to make a job offer to candidates even verbally and to ensure that communication channels with any third parties for example recruitment agencies remain clear.

(McCann –v- Snozone Ltd)

 

Solicitor ordered to pay £20,000 after proposing marriage to employee

Asghar Ali – the owner of AA Solicitors based in Bolton carried out a campaign of sexual harassment against a young paralegal – Miss Majid. During the interview for the position he asked her to marry him and suggested that a bed could be brought into the office.

Miss Majid politely declined Mr Ali’s advances and shortly after he dismissed her citing the reason that he could no longer afford to employ her.

The Employment Judge awarded Miss Majid £14,000 for injury to feelings (the middle Vento band), £4,000 in aggravated damages and £2,111 in loss of earnings. The award for injury to feelings was also uplifted by 10%.

It is worrying that this is still happening in 2016 and no less in the legal profession, where such behaviour brings the profession into disrepute.

(AA Solicitors Ltd (T/A AA Solicitors) & Anor v Majid UKEAT/0217/15/JOJ)

Call Steven Eckett, our employment solicitor on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

Employment Law Update – July 2016

Monday, August 1st, 2016

No changes to employment law says the Secretary of State for Brexit

The Secretary of State for Brexit– David Davis – has suggested that UK employment law will not be radically changed after the UK leaves the European Union.

He said in a blog for Conservative Home that ‘Britain has a relatively flexible workforce, and so long as the employment law environment stays reasonably stable it should not be a problem for businesses’. Mr Davis further added that ‘There is also a political, or perhaps sentimental, point. The great British industrial working classes voted overwhelmingly for Brexit. I am not at all attracted by the idea of rewarding them by cutting their rights’.

In the meantime we have no idea when Article 50 will be triggered or what will be negotiated in the interim period as a price for the UK to have access to the EU single market. This could for example include the retention of minimum employment law standards affecting TUPE and the Working Time Regulations. Currently everything appears to be uncertain and up in the air and the next couple of years are going to be interesting as Brexit is negotiated with our EU neighbours and implemented.

New Prime Minster promises worker representation on UK Boards

The UK’s new Prime Minister Theresa May in her opening speech as conservative party leader has promised that her government will serve the many and not the privileged few and was at the service of ordinary working people.

As part of that pledge Mrs May has also vowed to ensure that there is worker representation on the UK’s Boards of major companies as well as consumer representation. Her words have also pleased the Trades Union Congress where its General Secretary Frances O’Grady said that ‘Workers have a clear interest in the long-term success of their companies and deserve a bigger say’.

Currently some EU countries take worker representation seriously including Germany, Sweden and Denmark. It now look as though the UK will now follow.

New immigration laws on employing illegal workers come into effect

New laws came into effect on 12 July 2016 which imposes tougher penalties and sanctions for employing illegal workers which are designed to create a more hostile environment for undocumented migrants. The focus and impact will hit employers with heavy fines and imprisonment for those individuals who hire illegal workers.

Historically it has been an offence to knowingly employ a person who is not authorised to work in the UK and employers faced a penalty of £10,000 per illegal worker that they employed. This penalty increased to £20,000 as a result of the Immigration Act 2014, however from this month new tougher penalties come into effect.

The bench mark has now been lowered so that not only employers who knowingly employ illegal workers will be caught but also those who have ‘reasonable cause to believe that the employee is disqualified from employment by reason of the employee’s immigration status.

Any breaches of the new laws could result in a maximum period of imprisonment of up to five years for Directors and business owners.

Employees are also targeted in the new legislation where those found to be working illegally could face imprisonment of up to 51 weeks and/or a fine in England and Wales, and imprisonment of up to six months and/or a fine in Scotland and Northern Ireland. An illegal worker’s salary can now also be seized under the Proceeds of Crime Act 2002.

Immigration Officers also have new powers now to search an employer’s premises and to confiscate any evidence of illegal worker activity and offences.

There are also proposals to close premises for up to 48 hours where a company is found to have employed illegal workers but these have not yet been implemented.

It is strongly recommended that employers protect themselves by obtaining the employee’s original right to work documentation from the Home Office’s prescribed list before allowing a worker to commence employment and to question the validity of the document with the employee in person. Employers are also advised to keep clear copies of the documentation and to mark the date that the documents were checked and if possible to get this witnessed and verified.

There is also a new skills charge of £1,000 for employees who are sponsored to work in the UK and who come from outside the European Economic Area, which comes into effect in April 2017. These provisions may well be diluted or abolished once we have a timetable in place for Brexit.

Employment Tribunal Judgments can soon be viewed on-line

Her Majesty’s Courts and Tribunals Service has confirmed that future employment tribunal judgments will be made publicly available on-line from the autumn.

Their database will allow a search of all first instance decisions across the UK.

This will be a welcome development as the only way of accessing these decisions at the moment is to attend the Central Employment Tribunal offices at Bury St Edmunds for decisions made in England and Wales and Glasgow for Scottish decisions.

Call Steven Eckett on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

Employment Update – June 2016

Thursday, June 23rd, 2016

The modern Slavery Act 2015 and the implications for suppliers

The modern Slavery Act includes a provision requiring businesses with a minimum turnover of £36million per annum and which supply goods and services to provide a slavery and human trafficking statement for each financial year. The requirement is to provide a statement of the steps taken to ensure that slavery and human trafficking are not taking place in any part of their business or supply chain, or alternatively that no such steps have been taken.

It is important to bear in mind that businesses with this type of turnover will have their own supply chains, and that there is a legal requirement to report on them. In practice these businesses will require these smaller suppliers to report to them, and it will be important to put policies in place to deal with situations where an existing supplier is found to have been involved in modern slavery, or perhaps to implement stricter investigations into their suppliers when tendering for their services.

The implication is that it is likely to mean that smaller businesses will need to consider their own actions and supply chains to ensure that they do not lose out on future tender bids. Something for all businesses to think about where they have a supplier relationship.

Trade Union Act 2016

These provisions received Royal Assent on 4 May 2016 however there is no current date that has been set for these provisions to come into force. When the act does come into force it will introduce the following controversial provisions:-

. A 50% turnout when balloting for industrial action

. In the public sector, employees can only take industrial action if the ballot has the backing of at least 40% of eligible trade union members, as opposed to 50% of those who vote.

. The notice requirements will double from 7 days to 14 days unless the employer agrees to the shorter notice period of 7 days.

. There is a 6 month time-limit for industrial action after which a fresh mandate will be required.

. The ballot paper must contain a clearer description of the dispute and the planned industrial action.

The Third Party (Rights against Insurers) Act 2010

These provisions will come into force on 1 August 2016. The aim of the legislation is to provide an effective mechanism for Claimants to seek recovery directly from an insolvent Defendant’s liability insurers. The Act also allows a Claimant the right to serve notice on all companies, Directors and Insolvency Practitioners requiring disclosure within 28 days of all information relating to the Defendant’s liability insurance. This will prove a welcome relief for many Claimants and will provide another avenue for them to try and recover their losses. No doubt there will be case law development that may impact on the success of this new remedy.

Gender Pay Gap reporting – Key dates to keep in mind

Gender pay gap reporting does not come into force until 1 October 2016 however qualifying employers are required to collect information from as early as last month (May 2016). Here are some useful dates to keep in mind.

1 May 2016

Employers should start to collect data for the first reporting period. Data also includes bonus payments up to April 2017 which are captured.

1 October 2016

The Equality Act (Gender Pay Gap Information) Regulations 2016 are expected to come into force. This will place a burden on all private and voluntary sector employers with 250 or more employees to publish information about any gender pay gap in their organisation.

1 May 2017

Qualifying employers will be required to undertake calculations to determine any gender pay gap results.

30 April 2018

Qualifying employers will be required to publish the results of their gender pay gap analysis on their organisations website before 30 April 2018 and they must be publicly accessible. The results must also contain a signed statement that the information is accurate and must remain on the website for a minimum of three years. The results must also be uploaded onto the Government’s reporting website.

No injury to feeling awards for breach of the Working Time Regulations

The Claimant won her employment tribunal claim after her employer failed to provide her with the requisite 20 minutes rest breaks in shifts of 6 hours or more. The Claimant sought an award for injury to feelings and this was refused by the Employment Judge at first instance.

The Claimant subsequently appealed and the Employment Appeal Tribunal held that a worker cannot claim compensation for injury to feelings if they are refused rest breaks in contravention of the Working Time Regulations 1998 Rag 12(1). This is on the basis that there is nothing in UK law or EU law that provides for this as a remedy. The true remedy in this situation would be similar to a claim for a breach of contract. (Santos Gomes –v- Higher Level Care Limited UKEAT/0017/16/RN)

Call Steven Eckett on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

What Are The Implications For UK Employment Law In The Event Of Brexit?

Monday, June 13th, 2016

A referendum will take place in the United Kingdom (UK) on 23 June 2016 to determine whether the country remains or leaves the European Union (EU). This is commonly known in the media as ‘Brexit’. Much of the debate has focused on immigration, sovereignty and the economy. However, what is unclear in the event of Brexit is what will happen to employment rights in the UK and whether they are at risk of being dramatically watered down.

EU law is of course the source of many of the UK’s employment rights From TUPE to the Working Time Directive. Many of our employment laws were already in place before the United Kingdom’s membership, for example unfair dismissal and redundancy rights.

Given the significant uncertainty raised by the EU referendum and to assist HR with contingency planning, we have focused on some of the key issues that may arise in the event of Brexit:-

In the event of Brexit what type of relationship would the UK have with the EU?

This question has been raised many times during the course of the various debates that have taken place in recent months. No member country has ever left the EU (apart from Greenland when it left the EEC in the 1980’s) and therefore it remains unclear in terms of the type of relationship that will follow. It is especially unclear whether it will cost more to trade with the EU and its effect on the free movement of people and workers, and those who already live and work in another EU country. Other European countries who are not part of the EU but who are part of the European Economic Area (EEA), for example Iceland and Norway do business with the EU and are governed by various rules relating to the principle of the Single market and free movement of people and goods.

In relation to the rights of EU nationals working in other EU member states, transitional arrangements would no doubt form part of any negotiations and it is likely that EU nationals already working in the UK would be permitted to stay in return for similar arrangements for UK citizens working in other EU countries. The main issue will be on future immigration into the UK where a points-based system similar to the Australian model has been mooted.

In the event of Brexit how long would it take the UK to leave the EU?

In the event of Brexit, it is likely that it will take some time to withdraw from the EU and to negotiate various complexities for the process and eventual date of leaving. The most likely scenario is that it would take a minimum of two years’ for the UK to leave the EU and the fact of withdrawal will need to be ratified with the EU and the terms agreed. Once again we are stepping into the unknown because it is the first time that a member state will have left the EU.

What are the likely implications for UK employment law?

The current thinking from many lawyers and commentators is that a vote to leave the EU would not have any immediate impact on UK employment law and that many of our current laws, both domestic and EU orientated, would be retained. It is likely that it would take some time to formally withdraw as a member of the EU and in that period most employment laws will probably remain unchanged.

Another scenario depends on the UK’s post Brexit relationship with the EU and whether the UK will be required to retain any EU orientated employment laws in exchange for entering into any trade or other deals. It is also important to remember that many of the employment laws that have originated from the EU for example TUPE have become inherently built into work-place practices and procedures, especially where there is a trade union presence and recognition. It would also be politically unattractive for any political party to propose dismantling employee and workers’ rights even from businesses who now accept the need for minimum legal standards in the workplace.

Let’s have a look at some of our employment laws in more details and analyse the effect that Brexit might have on them:

1. Unfair Dismissal and Redundancy

These rights were implemented in the UK before our membership of the EU. There has been some tinkering with these rights over the years for example in relation to the qualifying period of continuous employment required in order to make a claim for unfair dismissal. This is currently two years. It is therefore likely that Brexit will have little impact on these rights and will be better protected in the event of a future Labour or Coalition government.

2. Parental rights

Here we are talking about statutory maternity, paternity, parental and adoptive leave and associated pay. It is a myth that but for the EU, workers in the UK would not receive these rights. The fact is that some of these rights for example shared parental leave which came into effect last year originated in the UK. In addition to this, many of these rights are more generous in the UK than in other EU member states. It is therefore unlikely that Brexit will have much if any impact on these rights and their maintenance and any improvement is likely to depend on the state of the economy and the political colour of the Government.

3. Unlawful discrimination

Once again the UK has been consistently ahead in implementing anti-discrimination laws, which first came into effect in the 1970’s with sex discrimination and race discrimination protections. Today various protected characteristics are now enshrined in law to include age discrimination, disability discrimination, sexual orientation discrimination and religious and/or belief discrimination. It would be politically suicidal for a future Government to scrap or water down these protections and it might be a condition of the EU to maintain these rights in principle for future trade deals. It might be more likely that a future Government might introduce some changes for example implementing a financial cap on employment tribunal awards.

4. Working Time rights

Statutory annual paid holidays (20 days plus bank holidays) in the UK were introduced in 1998 as a result of the EU Working Time Directive. This also protected worker’s rest breaks, and hours of work, although the UK won an opt-out in that workers could not be forced to work more than 48 hours per week. Although unpopular with some businesses, these rights have become entrenched into our employment culture and it would be not be a popular move for a future Government to abolish or significantly water down these protections. A future Government may abolish the 48 hour opt-out or may strengthen it.

5. TUPE

This is one of the earliest and most complex pieces of legislation to emanate from the European Economic Community (EEC) as it was then known. It is unlikely that Brexit will change the fundamental way in which employees are protected in the event of a sale or purchase of their employer’s business. Once again these rights have become entrenched into UK employment law practice. The more likely scenario is that there may be a few minor changes, for example in the arena of collective consultation. This is nothing new as the Government has already reduced the consultation period for collective redundancies from 90 days to 45 days for those proposing redundancies of 100 or more employees.

6. Data Protection rights

As the UK will want to continue trading with the EU, the UK will no doubt have to continue to comply with the ‘safe harbour’ rules relating to the transfer of data between countries including the USA. Data protection from an HR perspective has also become so entrenched into good HR practice policies and procedures that it is unlikely that these will be abolished.

7. UK case law and sovereignty

This is a difficult area to predict. Currently the UK is bound by decisions of the EU Courts, for example the European Court of Justice (ECJ), and current decisions are unlikely to be affected. However in the event of Brexit, all future decisions will be determined by the UK Courts, including the Supreme Court. It will be interesting to see what happens where the UK courts have to for example rely on old ECJ decisions, to facts that are similar in the future and whether they can deviate from those precedents.

Summary

It is difficult to forecast with absolute certainty the impact of Brexit, as we are stepping into unknown territory which brings with it many future uncertainties for UK employment law. However it does seem sensible to assume that Brexit would not result in an immediate wholesale change to our laws. The more likely scenario will be a negotiation of the UK’s relationship outside the EU lasting a decade or more. During that negotiation, it is likely that the UK will want to access the EU single market and in return it is highly likely that the UK will have to maintain minimum standards in relation to its domestic employment laws and the free movement of people both inwards and outwards. On the other hand the country might vote to remain in which case not much will change and our employment laws will continue to evolve at both a domestic and EU level.

Call Steven Eckett on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

Leading Solicitors in London