Employment news round-up, September 2016

Employment law news in brief for September 2016.


Anne Palmer

Anne Palmer

Senior Associate

Employment news round-up, September 2016

The latest developments in employment law news and practice, reported by Anne Palmer. We have updated information on public sector exit payment reforms, along with all the news you need to know on this month's employment law changes, including our new monthly 'Brexit and your workforce - updater'.

Public sector exit payments – UPDATE

The draft Public Sector Exit Payments Regulations 2016 will introduce a cap of £95,000 on the pre-tax value of exit payments made to public sector employees. These regulations were expected to come into force this Autumn, but we have received confirmation that they will be delayed and subject to further consultation. It is now anticipated that the final regulations will be published and come into force in Spring 2017.  

The 'clawback' regulations - allowing for recovering of public sector exit payments where a high-earning employee is re-employed in the public sector within 12 months of receiving a severance payment - are expected to be published in their final form and in force this year.

In addition to the new cap and clawback arrangements, the government has published its response to its consultation on reform of public sector exit payments. The full response documentation can be viewed here. The new framework will require public sector employers to implement

  • a maximum tariff for calculating exit payments of three weeks’ pay per year of service
  • a ceiling of 15 months on the maximum number of months’ salary that can be paid as a redundancy payment
  • a maximum salary of £80,000 on which an exit payment can be based
  • a taper on the amount of lump sum compensation an individual is entitled to receive as they get closer to their normal pension retirement age
  • action to limit or end employer-funded early access to pension as an exit term.

The government has specified that it expects government departments to begin immediately producing proposals for implementing these changes, ready for consultation within three months, with a view to completing agreements within nine months, i.e. by June 2017.

National minimum wage in the press & October changes

Following hot on the heels of media reports of MiHomecare's alleged underpayment of wages, and various allegations around payment of staff at Sports Direct, this month the press reports that a group of care workers are bringing a claim against their employer for alleged serious breaches of national minimum wage and national living wage payments. We understand that elements of their claims relate to the complexities that can arise around minimum wage payments in relation to travel time and 'sleep in' or 'live in' arrangements – an issue which often arises for peripatetic workers, such as care workers and maintenance staff. Please click here for more information on how the complexities of this area of self-regulation work - and how you can keep yourself out of the courts and the newspapers.

And don't forget that the hourly national minimum wage rates are going up from 1 October 2016:

  • workers aged 21 to 24: £6.95
  • workers aged 18 to 20: £5.55
  • young workers rate (non-apprentices aged under 18 but above compulsory school age): £4.00
  • apprenticeship rate: £3.40.The new 'living wage' for workers aged 25 will remain at £7.20 an hour, and will not change on 1 October. However, it has also been confirmed that all national minimum wage rates, including the national living wage, will be uprated in parallel from April 2017.

Gender pay gap reporting - update 

We understand that publication of the final gender pay gap regulations has been delayed – they were expected to be published this Summer, but are now expected imminently, with the regulations coming into force in in April 2017. If the government sticks to this latest timescale, it is likely that the first relevant reporting date under the regulations will remain at 30 April 2017 as previously announced, i.e. the first gender pay gap reports will be due by the end of April 2018. 

There will be separate regulations published for the public sector – a consultation on this is out at the moment and closes on 30 September 2016.  Public sector organisations will be expected to publish their data in the same timeframe as the private and voluntary sectors, i.e. data captured in April 2017 and published by April 2018.

We have fed in to the government's consultation on this development, and are also advising clients on meeting their new obligations and steps to take now to prepare for this change. Please do contact me, or your usual Bevan Brittan contact if you would like a quote for a detailed briefing on this topic.

Employees' English language requirements – guidance

The government has published a code of practice on the new English language requirements which will be required of 'customer facing' public sector workers. The code aims to help public authorities to determine the necessary standard of English (or Welsh, in Wales) and explains the appropriate ways in which public authorities can set a standard of spoken English or Welsh; and provides options for remedial action where employees do not meet the necessary standard for English or Welsh.

The new language standards for public sector workers are expected to come into effect in October 2016, but there is no specific commencement date as yet.

Holiday pay and voluntary overtime

Although we still do not have binding authority on this point, an employment tribunal has recently ruled, in line with the general view amongst commentators, that voluntary overtime, and other payments associated with rotas worked voluntarily, should be included in statutory holiday pay. As this is only a tribunal decision, another tribunal would be free to reach a different conclusion – but it is indicative of the direction of travel on holiday pay calculations (Brettle v Dudley Metropolitan Borough Council ET/1300537/15).

Bevan Brittan on Brexit: Brexit and your workforce - updater

As we enter the post-EU referendum era and shape of our future relationship with the EU begins to emerge, we will be keeping you up to date on Brexit developments as they impact on workforce issues, both via Employment Eye and our Twitter feed (@BevanBrittanEmp).

  • Reduced labour turnover expected. The CIPD and Adecco Group UK & Ireland has published results from a survey which shows that recruitment is expected to drop by 4% following the EU referendum. The survey also show that 33% of employers expect Brexit will have the effect of increasing costs and 21% of employers expect to reduce investment in training and skills development and equipment. A significant minority of employers - 40% - believe Brexit will make it more difficult for them to recruit EU migrants over the next 12 months. The survey also showed that almost half of employers want information on the implications of leaving the EU around employment law and regulations. To that end, please see our Brexit and immigration briefing note and our infographic on Brexit and your workforce – what happens next?
  • A new health and social care / Brexit coalition has been formed. The coalition is called the Cavendish Coalition and is formed of 29 health and social care organisations. The coalition says that it will act as a single voice to influence post-EU referendum matters and provide advice during negotiations on issues affecting the health and social care workforce. The coalition's view is that EU citizens working in the UK’s health and social care sectors should remain in the UK. The coalition’s full statement of purpose is available here. Updates from the coalition can be followed using the hashtag #CavendishCoalition.
  • The House of Commons library has published a detailed Brexit briefing paper. The paper can be found here and covers the impact of Brexit on a number of policy areas, including employment law (starting at page 47). The paper provides useful background information on how UK employment law interleaves with EU law; it outlines various options open to government and describes the diverging views on the likely impact of Brexit on workforce policy. The paper does not give any definitive guidance on what we might expect in terms of changes to employment policy, but it does reiterate David Davis' view that deregulation of EU derived employee rights would not be a priority post-Brexit.

New government apprenticeship guidance published

The Department for Education has published new guidance on the revised apprenticeship system including guidance on how the apprenticeship levy will work, proposals for how the apprenticeship support package for employers will work from May 2017, and what employers need to do to become a training provider.

Checking convictions – working with children

The Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975/1023 has been amended to cover activity relating to children that would constitute "regulated activity" in relation to children if it were to be carried out more frequently. The effect is that a person's spent convictions and cautions may be taken into account when assessing a person's suitability to engage in such activity with children, even if they only carry out work on an occasional basis.

Employee bus passes are a taxable benefit

A first tier tax tribunal has ruled that a free bus pass, provided by a local authority, is a taxable benefit. The Council in question had argued that the bus pass should be exempt from tax under section 243 of the Income Tax (Earnings and Pensions) Act 2003, because it constituted 'financial support' for a local bus service. The tribunal rejected that argument and said that there must be something more than simply the provision of bus passes in order to amount to 'support' for a local service, e.g. if the employer has given support to the bus operator in order to support a bus system used by its employees, a zonal pass for that system may fall within the exemption. However, on the facts of this case, there was no evidence of any such support, so the purchase of the employee's bus pass was a taxable benefit. The full decision is available here.

Information law news

  • EU-US data transfers – what's the latest position?

The Information Commissioner's Office (ICO) has published a blogpost summarising the current position on EU-US data transfers. As you may remember, the 'Safe Harbor' principle, for EU-US data transfers, was thrown into doubt by the European Court of Justice last year (please click here for an explanation). The ICO reminds organisations who continue to rely on the Safe Harbor framework that they are in breach of the Data Protection Act 1998 and potentially at risk of enforcement action. It urges organisations not to delay in making valid EU-US data transfer arrangements.

  • ICO fines GP surgery for data breach

As Jonathan Moore, of our Information Law team reported last month, a fine of £40,000 has been imposed on a GP practice for a data breach involving a patient's personal details being wrongly disclosed. The fine would have been higher, but for the individual liability of the GPs for the practice.

  • Are you ready for the new General Data Protection Regulation?

Our Information Law team has been running a series of free briefings on the new General Data Protection Regulation. This is coming into force on 25 May 2018 and will spell a number of significant changes for the processing of personal data. We currently have spaces available for our Birmingham event on 4 October 2016 - please click here for further information and booking details.

Dates for your diary – free training events

Our annual round-up of the latest developments in employment law, and preview of forthcoming changes, will be taking place in December at Bevan Brittan's 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. Please keep an eye on our website and your in-box for more details and booking arrangements.

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