Autumn Statement 2016
The Chancellor, Philip Hammond, issued his first Autumn Statement on 23 November 2016.
Key points for employers are as follows.
- The National Living Wage will be increased from £7.20 per hour to £7.50 per hour from April 2017.
- Tax savings through 'salary sacrifice' schemes will be withdrawn, except for pensions (including advice), childcare, Cycle to Work scheme and ultra-low emission cars. Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021. Note, however, that (separately) the government intends to phase out the current childcare voucher scheme and replace it with a new 'tax free childcare scheme', to commence in April 2017.
- The government will issue a consultation on employer-provided living accommodation and a call for evidence on the valuation of all other benefits in kind at Budget 2017.
- The government will publish a call for evidence at Budget 2017 on the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer
- The Autumn Statement confirms that the exemption from income tax and NI for termination payments up to the current threshold of £30,000 will be retained but employer NI contributions will be payable on payments above £30,000 from April 2018 (as previously announced in the Budget)
- Employee and employer National Insurance rates will be aligned from April 2017, so that both employees and employers will start paying National Insurance on weekly earnings above £157.
Whistleblowing – new protections and new code of practice
The Department for Business Energy and Industrial Strategy (BEIS) has announced new pre-employment protection for whistleblowers applying for jobs in the children’s social care sector. This will be included in the Children and Social Work Bill 2016-17.
The government also announced that the existing BEIS code of practice for employers on whistleblowing will be updated by the end of the year.
Costs against litigant in person
In a decision which will be welcomed by any employer who has had to grapple with imprecise pleadings lodged by claimants acting without legal representation, the Employment Appeal Tribunal (EAT) has said that costs could be awarded against a litigant in person who had failed to properly particularise her claim. This was found to be the case notwithstanding the leniency usually shown by employment tribunals towards claimants acting on their own behalf. In Liddington v 2gether, the claimant had been given several opportunities to clarify the nature of her claim and had failed to do so. The EAT said that costs could correctly be awarded against litigants in person where they have failed to put their case in a form that can properly be responded to. Bevan Brittan acted for the successful employer in this case.
- As has been widely reported in the press this month, the High Court has ruled in R (Gina Miller and Deir Tozetti Dos Santos) v The Secretary of State for Exiting the European Union, that action to trigger the process for leaving the European Union cannot be taken by the Prime Minister under her prerogative powers. The Supreme Court has since granted the government application to appeal that decision and the hearing will skip the Court of Appeal stage and 'leapfrog' straight to the Supreme Court. The appeal hearing at the Supreme Court has been listed for 5 – 8 December 2016, and judgment is expected to follow early in the New Year.
- Meanwhile, Ministers have focussed their attention on the question of workers' rights in a post-Brexit world. According to Hansard, on 7 November 2016, BEIS minister Greg Clark said that the government would transpose current EU-derived employment rights into UK legislation and the government had no intention instituting a 'sun-set' clause to remove current workforce protections.
- The House of Commons Library has published a briefing paper on the legal, constitutional and financial uncertainties around Brexit. The paper covers
- the meaning and operation of Article 50 of the Treaty of the European Union
- the negotiation 'unknowns', which includes almost all policy questions
- whether there will be a further referendum on the terms of the withdrawal agreement (thought to be legally possible but politically unlikely).
- A further briefing note was published by the House of Commons library on 11 November 2016, which includes a 'reading list' of analysis and comment on the process of withdrawal from the European Union, including library briefing papers and parliamentary committee reports on Brexit.
- Finally, remember that the General Data Protection Regulation will still be coming into effect in May 2018 – notwithstanding the Brexit process - and there will be a number of changes to current practices and new obligations that HR teams need to consider now in order to ensure compliance with the GDPR by May 2018. To give just a few examples of the work that needs to be undertaken to comply with the new regulation, a number of policies will need amending and consideration will need to be given to the content and retention of personnel files. Please contact Joanna Smart, specialist Employment / Information solicitor, for more information, and please click here for a brief summary of the General Data Protection Regulation.
- LGPS - new investment rules & publication of investment strategy
New regulations, the LGPS (Management and Investment of Funds) Regulations 2016, will require that administering authorities under the Local Government Pension Scheme (LGPS) publish investment strategy statements. The first statements must be published by April 2017 and then kept under review and revised from time to time and at least every three years. The Secretary of State for Communities and Local Government will have powers to intervene if they fail to do so. The investment strategy statement must include the authority's assessment of the suitability of particular investments and other matters, such as the authority's attitude to risk. Please click here for full detailed guidance on preparing and maintaining an investment strategy statement, published by the Department for Communities and Local Government.
- Important changes on the horizon for the NHS Pension Scheme
The Department of Health has launched a consultation on its intention to introduce a scheme administration levy of 0.08% of a member's annual pensionable earnings. It is expected that this proposal will be put into effect, so this is an important development to note. According to the consultation document, the levy will apply from April 2017 and will be fixed until 31 March 2019. Thereafter it will be reviewed by the Department of Health every four years. Changes to scheme regulations are required to introduce the levy, so, therefore, draft legislation is also presented within the consultation documents, which can be accessed here. The consultation will close on 9 January 2017.
Employment tribunal decisions online
HM Courts and Tribunals Service (HMCTS) has confirmed that first instance employment tribunal decisions will be available online by the end of this year or early in 2017. However, the new service will only be available for decisions made after the introduction of the database. The current system of requesting paper copies of tribunal decisions from the Bury St Edmunds tribunal will continue to operate in relation to decisions which pre-date the introduction of the database.
Public sector English / Welsh language requirements – now in force
On 21 November 2016, the new requirement for public authorities to ensure that all public sector workers in 'customer-facing' roles can speak fluent English / Welsh came into force. Public authorities are defined as organisations with functions of a public nature.
In addition, public authorities must ensure that they have in place an appropriate complaints procedure for members of the public who believe that the English / Welsh language requirements have been breached.
A code of practice explains what is required of 'customer facing' public sector workers and provides options for remedial action where employees do not meet the necessary standard of English or Welsh.
Free client updates – December 2016
Our annual round-up of the latest developments in employment law, and preview of forthcoming changes, will be taking place in December at our offices, on the following dates and at the following locations.
- Birmingham – 6 December 2016
- Bristol – 7 December 2016
- Leeds – 8 December 2016
- London – 14 December 2016
Registration will open at 9.30am, with the session starting at 10.00am and followed by lunch at 1.00pm. This is a free event and we still have limited places available. Please click here for more details and booking arrangements.