The top employment law news for October 2015, selected by Alec Bennett and covering: collective redundancy; shared grandparental leave; a raft of new developments in relation to workers from overseas; proposed caps on NHS agency spending; and zero-hours contracts.  We also provide details of our free annual review of employment law, hosted at our offices.

Collective redundancies – USA v Nolan

You may recall that the question of when collective consultation obligations are triggered has been the subject of long-running litigation: United States of America v Nolan.  Please click here to read our summary of the background to this case.  The Supreme Court has, this month, ruled that our domestic legislation (the Trade Union and Labour Relations (Consolidation) Act 1992) does apply to an American military base located in the UK.  This means that the case will be sent back to the Court of Appeal, so that it can decide the substantive issue: do collective consultation obligations arise when the employer is proposing, but has not yet made, an operational decision that will lead to collective redundancies; or, do those obligations only arise when that operational decision has actually been made and consequential redundancies are proposed.

Collective redundancies – new focus on criminal sanctions

It has been reported this month that charges have been brought against company directors of City Link and Sports Direct, relating to failures to provide sufficient notice to the Department for Business Enterprise and Skills (BIS) of collective redundancies in respect of two failed businesses. These are thought to be the first criminal prosecutions for a failure to consult under the Trade Union and Labour Relations (Consolidation) Act 1992 and appear to indicate the government's increased willingness to make use of its enforcement powers under this Act. 

By way of a reminder, employers are required to send Form HR1 to notify BIS if they are proposing to dismiss as redundant 20 or more employees 'at one establishment' within a 90-day period. Failure to do so is a criminal offence and the penalty is a fine – the upper limit of the fine was £5,000 until 12 March 2015 but the fine is now unlimited.

In the light of this development, you may wish to refresh your training for managers, senior staff and directors, and / or check that there is a reminder about the importance of sending the HR1 form in your standard procedures, managers' briefings or guidance notes on collective redundancies.  In doing so, remember to take account of the up to date position on determining the definition of 'one establishment' for the purposes of collective consultation – the law on this point has now come full circle, and returned to the settled position prior to the 'Woolworths' case (USDAW v Ethel Austin and another) – please click here for our summary. Please do get in touch if you would like any assistance with training, or reviewing your documentation, in relation to collective redundancies.

Shared grandparental leave

As has been widely reported in the press, shared grandparental leave is on its way.  The details are still unclear, but we expect to know more when the consultation is launched next year.  However, it seems that the government anticipates that parents will be able to 'transfer' leave to a grandparent who is still working and has caring responsibilities for the parent's child. The aim is to bring this type of leave into operation by 2018.

Language requirements for public sector workers

As we reported in our August 2015 immigration briefing, the government has announced a package of measures under the Immigration Bill, including the introduction of new minimum English/Welsh language requirements for 'customer-facing' public sector workers.  A draft Code of Practice has now been published and a consultation on the Code has launched.  Public authorities will have to consider the Code of Practice when deciding how to comply with the new legal duty, which will be based around response to complaints rather than requiring authorities to take 'direct action'. The draft Code sets out how authorities should deal with complaints, and also provides general guidance on best practice when implementing the new language requirements. Please click here to see the consultation document and the draft Code of Practice.  The consultation closes on 8 December 2015.

Immigration news

  • The government is proposing to ban recruitment agencies from recruiting work-seekers solely from overseas EEA countries, without advertising the relevant vacancies to domestic work-seekers. This follows the introduction of a new requirement in January 2015 that prevents recruitment agencies from advertising British vacancies solely in overseas EEA countries, unless certain conditions apply. The government is consulting on this proposal until 23 November 2015, and is expected to publish its response by 15 February 2016. The consultation documents are available here.
  • The Home Office has announced this month that it is lifting immigration controls on nurses working in the NHS, in an effort to ease the anticipated forthcoming winter pressures. This will be a temporary measure, but the Migration Advisory Committee has been asked to consider whether this change should be made permanent. The Migration Advisory Committee will be reporting on its findings by 15 February 2016.
  • In a separate development on overseas workers, the Supreme Court has ruled, in Mandalia v Secretary of State for the Home Department, that the Home Office should exercise its 'Evidential Flexibility' policy where a foreign national has made a minor mistake in documentary evidence provided to support an application for further leave to remain – Mr Mandalia had provided bank statement covering a period of only 22 days, where a 28-day requirement existed.  Mr Mandalia had otherwise fulfilled the financial criteria.  However, the Supreme Court said a case-worker should have exercised flexibility and asked Mr Mandalia to provide statements to cover the additional 6 days.

Caps on agency spend

Monitor and the NHS Trust Development Authority have announced proposed caps on the hourly rates paid for agency staff, and the proposals are currently subject to consultation

The proposed hourly price caps would apply to:

  • all staff groups employed by NHS trusts and NHS foundation trusts, including nursing, medical, all other clinical and other non-clinical staff; and
  • all agency staff, including bank staff.

The price caps will not apply to substantive/permanent staff or staff employed by ambulance trusts.

The initial proposed price caps will be introduced on 23 November 2015 and then, subject to monitoring, the caps will be reduced further, in two stages, so that by 1 April 2016, agency staff pay rates would be equivalent to national NHS pay rates for substantive staff.  This is expressed as a maximum of 55% above the relevant national pay rates (Agenda for Change or doctor basic pay scales) for an agency worker employed either via an agency or direct engagement. The 55% uplift is said to account for employment on-costs, including employer pension contribution, employer national insurance, holiday pay to the worker and administration fees/agency charges. A table showing the full staged payment caps is set out on page 5 of the consultation document.

Guidance on zero-hours contracts

The Department for Business Innovation and Skills has published new guidance on zero-hours contracts and how they should be used.  The guidance includes information on various aspects of zero-hours contracts, including employment rights, appropriate and inappropriate use, alternatives, best practice and exclusivity clauses.  This development builds on the introduction of the ban on exclusivity clauses in zero-hours contracts, which came into effect in May 2015.

Employment law 2015 – an update and a look ahead

Our popular year-end round-up of the most significant workforce legal developments of the year, and horizon scanning for the coming year, will be taking place in Birmingham on 1 December, Bristol on 2 December and London on 3 December 2015.  If you have not received an invitation already, please click here for further details and to register your interest in this free event. Please remember to sign-up quickly - we expect places to fill fast! Topics covered will include:

  • Working time for 'mobile' employees
  • Gender pay gap reporting
  • Wages reforms: NMW and the 'Living Wage'
  • The Trade Union Bill
  • The Immigration Bill & new language requirements
  • Holiday pay
  • Collective redundancy consultation
  • Zero-hours contracts
  • Public sector exit payments

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