Employment law: a look ahead

What are the key employment law developments on the cards for 2016 and beyond? Sarah Maddock reports.

17/12/2015

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Sarah Maddock

Associate

Date 

Development

15 February 2016

Overseas recruitment

The government is due to publish its response to the consultation on the proposed ban on overseas only recruitment. The effect of this change would be to compel recruitment agencies to advertise in Great Britain each time they are engaging in recruitment activity overseas, with a view to filling the vacancy from work-seekers living in Great Britain.

April 2016

The National Living Wage

A premium on the National Minimum Wage (NMW) will be payable by employers to their workers aged 25 and over.  The National Living Wage (NLW) will be over and above the NMW. The government will set the first premium in April 2016 at 50p, which will increase the total combined minimum hourly rate to £7.20.

By October 2016, the Low Pay Commission has been asked to recommend the level of the NLW to apply from April 2017 and provide an indicative premium rate for April 2018.

Cap on NHS agency staff fees

The first phase of the introduction of a cap on NHS agency staff fees was introduced on 23 November 2015, and will be fully in place by 1 April 2016.  Full details of the rates applicable are in the consultation response.  When the cap is fully in place, agency staff pay rates will be equivalent to national NHS pay rates for substantive staff, which is expressed as a maximum of 55% above the relevant national pay rates. The 55% uplift is said to account for employment on-costs, including employer pension contribution, employer national insurance, holiday pay and administration fees/agency charges.

Public sector exit payments

The government proposes to introduce a repayment mechanism if 'high earning' employees who have received an exit payment are re-employed in the public sector within 12 months.  'High earning' employees are defined as those earning over £100,000 and re-payments will be tapered, on a pro-rata basis. Please click here to read our briefing on this topic.

Separately, the government intends to introduce a cap of £95,000 on public sector exit payments. Draft regulations have been published, for illustrative purposes only.  These regulations are likely to be re-published before implementation and no date for implementation has been announced.

Statutory payments

The Department for Work and Pensions has confirmed that there will be no increases to Statutory Maternity, Paternity, Adoption and Shared Parental Pay, Maternity Allowance, and Statutory Sick Pay for the tax year starting on 6 April 2016.

During 2016

Trade Union reform

Under the Trade Union Bill, the government intends 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 and a new expiry date for action to be taken following a ballot. The Bill would also introduce more stringent requirements for unions to supervise picketing.

Separately, the government also proposes to repeal the current ban on using agency staff to cover work which otherwise would be undertaken by employees who are on strike. No date has yet been published for implementation of the Trade Union Bill or the repeal of the ban on the use of agency workers during strike action.

The Immigration Bill

The Immigration Bill proposes to curb illegal working and prevent the exploitation of migrant workers by strengthening enforcement, imposing tougher sanctions on employers and making it a criminal offence to work illegally.

Zero-hours contracts

A new ban on exclusivity clauses in zero-hours contracts was introduced this year, and the government has consulted on anti-avoidance measures.  Draft regulations have now been published, providing protection from dismissal or detriment for employees / workers who have not complied with an exclusivity clause.

During 2016 (possibly later)

Gender pay gap reporting

Large employers (i.e. those with 250 or more employees) will be required to publish reports on any gender pay gap in their organisation.  Draft regulations are expected for early 2016 - but timings are yet to be confirmed and it is expected that there will be a transitional period after the regulations come into force. This means that publication of the first reports will probably be delayed until much later in 2016, and possibly even until 2017.

Early 2017

Tax-free childcare

A new scheme for tax-free childcare is timetabled to be introduced in early 2017.  This will replace the current system of childcare vouchers and will be open to all working parents (whether employees or self-employed) who have children under five and / or children with disabilities under seventeen.  Parents will be able to claim back 20% of their childcare costs.

By December 2017

EU Referendum Bill

A referendum on whether the UK should remain in the EU must take place by December 2017.  Should the referendum result in a 'Brexit' from the EU, this will have wide-ranging implications for the many aspects of our legal framework which have their roots in Europe, such as working time, collective redundancy consultation, discrimination, transfers of employment and family-friendly rights.

By 2018

Grandparental leave

The government has announced that it intends to extend shared parental leave and pay to working grandparents by 2018.

 

Cases on appeal

Employment tribunal fees

The Union, Unison, continues to contest the introduction of fees for the use of employment tribunals and the Employment Appeal Tribunal.  Having had their appeal to the Court of Appeal dismissed in August 2015, Unison has sought permission to appeal to the Supreme Court. In the meantime, a Ministry of Justice review of tribunal fees is due to report 'by the end of the year'.

Compensation cap

An application for judicial review of the statutory cap of one year's salary for unfair dismissal compensation was dismissed in May 2014, and an appeal was heard between 25 July and 24 October 2014. The application was made on the basis that the statutory cap of one year's salary in unfair dismissal cases is indirectly discriminatory on the ground of age, because older workers are more likely to be out of work for a longer period and therefore eligible for more compensation without the application of the statutory cap. Publication of the judgment is awaited. 

Collective redundancy consultation

A further hearing is awaited in the Court of Appeal, in the long-running case of United States of America v Nolan. This case concerns the question of when 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 only once the employer has made that strategic decision and is proposing consequential redundancies?  The European Court of Justice declined jurisdiction to decide this point, so the Court of Appeal is now left to make its final decision without guidance from Europe. Please click here for our summary of the background to this case and guidance on how employers should deal with collective redundancies pending the Court of Appeal's decision.

Agency workers

On 2 March 2016 the Court of Appeal is due to hear an appeal against the Employment Appeal Tribunal's decision in Moran v Ideal Cleaning Services Limited that the Agency Workers Regulations 2010 do not apply to a group of long-term agency workers who were assigned to one hirer for periods ranging between six and twenty-five years.  Please see the summary at the end of our January 2014 News Round-up for more details.

Whistleblowing

In Chesterton Global Limited v Nurmohamed, the EAT looked at the scope of the new requirement that a disclosure must be in 'public interest' in order to qualify as a 'protected disclosure'.  The EAT 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 a small group or sub-set of the public may be sufficient. Please click here to read our summary of the EAT's decision. The Court of Appeal will hear the appeal in this case on 5 or 6 October 2016.

Holiday pay

British Gas is appealing the employment tribunal decision that it is necessary to add words to the Working Time Regulations 1998, so that commission and similar payments are included in holiday pay. The Employment Appeal Tribunal heard this case this month and a decision is expected in the new year.  For a summary of the decision in Lock v British Gas, and an overview of recent holiday pay cases, please click here.

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