Employment Law Update - October 2019

In October, as part of our series of free HR seminars, we provided an update on Employment Law developments. For those who were unable to attend, here’s a summary of the key updates presented by managing director Dan Jenkins.

The Government’s Good Work Plan 2020

If you aren’t already familiar with it, the “Good Work Plan” is a published paper from the Department for Business, Innovation & Skills in response to an independent review of modern working practices in the UK. The independent review was conducted in July 2017 by Chief Executive of the Royal Society of Arts, Matthew Taylor. The “Taylor Review” as it has come to be known, raised several concerns which the Government has come to address.

The Good Work Plan is looking to tackle four specific areas:

  1. Employment status

  2. Increasing transparency

  3. Agency workers

  4. Enforcement

So, what’s changing?

The Good Work Plan is pledging to implement legislation that, among other things, gives all workers the right to a clearer understanding of their contractual status. As increasing numbers of employers adopt flexible working, and the continually evolving ‘gig’ economy, the Government wants to ensure that flexibility doesn’t increase the risks to job security and reduce workers’ protections.

The Government plans to require clarity of the various types of employment, particularly those used for agency and zero-hour workers, so that there is a clearer set of employment rights and rates of tax, making it easier for all to understand. This will be supported by the requirement for employers to issue a ‘statement of rights’ to workers upon their appointment.

The Government also plans to improve the way employment laws are enforced – particularly extending financial penalties to employers who underpay holiday entitlement to their workers. The maximum penalty imposed at Employment Tribunals is also likely to be increased to £20,000.

EU Settlement Scheme

If you have EU, EEA or Swiss citizens working for you, they will need to apply to the EU Settlement Scheme to continue living in the UK after 30 June 2021. Applications are now open and affected employees should be encouraged to get their applications in as soon as possible.

It’s important to note that if the UK leaves the EU without a deal, the deadline is brought forward to 31 December 2020.

Affected employees will need to be living in the UK before it leaves the EU in order to apply.

Successful applications will be given one of two status’s: settled status or pre-settled status. The applicant will not be given the option to choose which status they receive – it is defined by how long they have been living in the UK for. Each status has a different set of rights. These rights will also be different depending on if they UK leaves the EU with or without a deal.

Please ensure any affected employees keep up to date with deadlines and changes via the Gov.uk website.

Pay Gap Reporting

Gender Pay Gap reporting continues to apply to employers with 250 or more employees. They must continue to report on the pay gap between male and female employees each year, by 5 April. The calculations they need to provide are:

  1. average gender pay gap as a mean average

  2. average gender pay gap as a median average

  3. average bonus gender pay gap as a mean average

  4. average bonus gender pay gap as a median average

  5. proportion of males receiving a bonus payment and proportion of females receiving a bonus payment

  6. proportion of males and females when divided into four groups ordered from lowest to highest pay.

Employers can then provide commentary on the differences they have observed, highlighting possible reasons why for the differences, and any long-term plans to minimise the gap.

Employers with 250 or more employers are also now legally required to report on the Executive Pay Gap, that is, the difference in pay between the chief executive and the average worker. This regulation came into force from 1 January 2019, with the first reports due in January 2020.

In this report, employers must identify workers on the 25th, 50th and 75th quartile of pay when comparing employee pay to that of the CEO. The pay for the CEO must also include bonus payments and share-based incentives

Changes to Payslips

New changes were introduced in April 2019 for companies to provide payslips to all workers, not just employees. If pay varies according to time worked then the total number of hours must be shown.

Workers can now make applications to an Employment Tribunal for enforcement.

Current Consultations

There are a number of active consultations, where information gathering has recently closed.

Sexual Harassment – the consultation is gathering evidence as to whether current legislation is effective in protecting people from sexual harassment in the workplace.

Statutory Sick Pay (SSP) – this consultation includes a proposal to support small businesses with low-paid workers to be able to offer their staff SSP. It’s estimated that

2 million people would benefit from the entitlement to SSP, which would be funded by the Government.

Parental Leave – this consultation is looking into two areas. Firstly it’s considering the creation of Neonatal Leave and Pay entitlement, for parents of premature and sick babies who spend a prolonged period of time in neonatal care after birth. It also is reviewing changes to parental leave entitlements so that they “better reflect our modern society and the desire to share childcare more equally.”

Redundancy – Pregnancy Protection – this consultation is reviewing whether redundancy protection, currently available for maternity leave, should be extended to cover a period of time after the mother has returned to work. Consideration is also being given to offering the same amount of protection to adoptive parents or those taking shared parental leave.

Parental Bereavement Leave

At the end of 2018, the Government announced that it was introducing a new Parental Bereavement Leave and Pay Act. Due to come into force in 2020, although no exact date has been set, it will give employees 2 weeks’ leave if they lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy.

If the employee has 26 week’s continuous service, the leave will be paid at the current rate of statutory pay (£148.68 per week), otherwise the leave will be unpaid.

National Minimum Wage and Statutory Rates

Finally a reminder of the National Minimum Wage and Statutory Rates that came into place from 1 April 2019:

National Minimum Wage:

  • 25 years + | £8.21 per hour (National Living Wage)

  • 21-24 years | £7.70 per hour

  • 18-20 years | £6.15 per hour

  • 16-17 years | £4.35 per hour

  • Apprentice rate | £3.90 per hour (applicable if the apprentice is aged under 19 OR aged 19 or over and in the first year of their apprenticeship)

Other Statutory Rates:

  • Statutory Sick Pay (SSP) | £94.25 per week

  • Statutory Maternity/Paternity Pay (SMP/SPP) | £148.68 per week

  • Week’s pay limit | £525

Employment Tribunal

If constructive dismissal if awarded by an employment tribunal, the compensation is made up of a basic award and a compensatory award. There is a cap on both of these awards:

  • Maximum Basic Award is capped at £15,750

  • Maximum Compensatory Award is capped at £86,444

If you have any further questions about the updates detailed above, feel free to give the team a call on 01722 325833. They can offer advice in relation to your specific situation. Many business owners choose to work with us on a retainer basis so that they know they have access to employment law advice whenever they need it.

More information on our HR retainer packages here.

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