New Employment Laws Autumn 2017 update including GDPR

Posted by : | 5th Sep 2017 | Employment law for HR Directors

There has been an enormous amount going on in terms of employment law and HR in the first half of 2017:  from the Supreme Court ruling that tribunal fees were unlawful in July, to the workplace implications of the B-word, Immigration, the Taylor Report, the BBC’s Gender Pay Gap story, the Modern Slavery Act and the “Gig” economy cases and of course, the impending New Data Protection Regulations (GDPR) that come into force in the UK in May 2018 and their implications on HR Data.  It all makes for an busy and highly emotive mix of topics.

This New Employment Laws Autumn 2017 update cuts through the confusion and speculation.

  • the Employment laws to know,
  • the likely impact of  those”Gig” economy case decisions and the Taylor Report on HR practice.
  • what you need to be thinking about when planning HR to the end of 2017 and into next year.As Q4 and the end of the summer holidays is a peak time for receiving flexible working requests, we have included our popular slide share on how to handle these lawfully and practically, to the right of this article and here.  To stay on top of these developments and what they mean for your business, make sure you have subscribed to our updates by clicking here sign up now or the button in the column to the right of this article.

New Employment Laws 2017 update:  what they mean for business

Click on the headings in the table to jump to more details.  The “Next Steps” column highlights some initial actions you can take.

 

Date New Laws for 2017 Next Steps
26th July 2017 Employment Tribunal Fees
In a hugely significant overturn judgement The Supreme Court declared ET fees, and EAT fees unlawful.
The Court ruled in favour of UNISON, who brought the case, taking the view that the way ET fees had been introduced prevented access to the tribunal system [and therefore justice] and so had been unlawful from the outset.There had been a dramatic fall in the number of ET claims brought since the Fees Order came into force in 2013. Figures record 83,031 applications to tribunals in 2015-2016, down from more than 190,000 in 2012-13.The ruling means that the government will be paying back those who have paid out tribunal fees over the last four years.
Employment Tribunal Fees were abolished on 26th July 2017. From this date, employees no longer need to pay tribunal fees to bring a claim claim.Employers can expect to see an increase in claims following this ruling and as time goes on, potentially to levels seen before the current fees were introduced.As ever, keep policies and procedures both rigorous and up to date, make sure line managers are fully familiar and follow them systematically and consistently. Nip staff problems in the bud early, don’t leave them to develop.
Please note the abolition of tribunal fees ruling does not affect the requirement that employees contact Acas Early Conciliation before bringing a claim; this remains in force.Following the ruling, Acas’ Early Conciliation Service is likely to see greater activity as potentially the numbers of claims increase.Employees who have paid fees can apply to the ET where their case was heard for reimbursement. Employers can do the same or apply via their lawyers.
11th July 2017 Taylor report published. Ongoing. Employment Status of Workers July saw the publication of the long awaited recommendations of The Taylor Report into the changes required in employment practices to keep up with modern business and the “gig” economy. They are of course just recommendations, and would need government approval before becoming law.

  1. “gig” economy workers should receive holiday and sick pay. The “gig” economy refers to companies who use technology based platforms (such as Uber, Deliveroo, Cycle couriers, Hermes) where people are paid on a “per job” basis and work is often insecure, uncertain, where flexibility and low pay go hand in hand.
  2. All workers (including those in the gig economy) who are neither full employees nor genuinely self-employed should be reclassified in Employment Law as Dependent Contractors. This would mean they are automatically entitled to sick pay, holiday pay, and the minimum wage. If implemented, this reclassification would shore up the rights of those working in insecure roles and lead to greater wage costs for employers.
  3. The definitions of self -employed or employed should be the same under both Tax Law (i.e HMRC) and Employment Law (i.e at Employment Tribunals).
  4. The report supports increasing class 4 NICs for the self employed as originally announced in the Spring 2017 budget but which was subsequently abandoned. It also argues for Auto Enrolment Pensions to be available to the self-employed.
  5. There are technical recommendations to ensure that agency workers are more protected and in particular have a right to request a direct employment contract with the company they are working for after 12 months of work; so that they stop being supplied by the agency and have a right to request to become employee of the company where they have been working.

An opportunity missed perhaps.  The Taylor Report called for more clarity in how the law recognises employment status and the rights that go with it. The creation of another category of dependent contractor can’t be said to add any clarity.

We will report on any of the Taylor recommendations that the government decides to implement into law as, if and when this happens.

There will be no immediate change of the law following the Taylor report.In high profile cases of the year, (Uber, City Spring, Pimlico Plumbers, Deliveroo) the trend of the courts has been towards finding for worker status (rather than self-employed status) when these businesses have been challenged; this trend looks set to continue.Do you have workers, freelancers, contractors in your business?
(If you are unsure, please get in contact. We can do an employment status audit which will give you the full picture on your workforce’s employment status.)Make time to check and where necessary tighten contractual documents.Even so, bear in mind that it’s going to become harder to prove that a freelancer or contractor in your business is genuinely self-employed; i.e in business on their own account.In future Employers are likely to have the responsibility for proving that their contractors are genuinely self-employed and not workers or employees.Consider the level of control your business has over your contractors’ work? Do you tell them what to do, when, how, and where?

This issue of control will become even more important in determining employment status.This can be a minefield, so do make contact if you are in any doubt about the employment status of your people in the business.

6th April 2017 – for reporting End April 2018 – for publishing Gender Pay Gap reporting
In mid-2015 the government announced legislation requiring large UK employers with workforces of over 250 to calculate and publish their gender pay gaps, and to reveal the number of men and women in each pay range, to show where pay gaps are at their widest.The gender pay gap is not the same as gender pay inequality or wage discrimination: it doesn’t mean ”women getting paid less for doing the same work as men”.The row over male and female presenters’ salaries at the BBC shows what happens when there is clear disclosure of salaries by job role across the sexes. The gender pay gap, as employers are being asked to report it, refers to the differences in average pay between men and women. It is worked out using most common hourly earnings figures for UK employees.
Employers with over 250 staff will need to start calculating their gender pay gap from April 2017; 12 months ahead of the first tables being published in April 2018.All the data will eventually be available on a government database.This means that the details of their gender pay gap will be publicly available, including to customers, employees and potential future recruits.The gender pay gap received a great deal of media coverage over the summer. Whatever the size of your business, consider taking new or faster actions to identify, reduce or eliminate gender pay gaps within your organisation.Follow our worked example of gender pay gap calculation below and be prepared for questions from your workforce.ACAS reporting guidance.
Use 2017  to get ready for 2018 Data Protection New regime coming in 2018
The EU General Data Protection Regulations (GDPR) which harmonises data protection rules across the EU including the UK will affect employers in 2018. Personal data: 
There will be new rules which employers must follow before employees give consent to the processing of their personal data held for example by HR departments and Payroll.
Right to be forgotten:There will be a new employee “right to be forgotten” which will allow employees to request deletion of their data.Amend it, Delete it, Freeze it.The Data Subject Access Request procedure will also change.  There will be an employee “right to rectification” allowing employees to insist in certain circumstances on making changes to their personal data held by the employer.
 There will also be increased fines for non-compliance.
The Modern Slavery Act 2015
The Modern Slavery Act 2015 requires companies with a turnover in excess of £36 million to produce and publish a yearly statement outlining the actions they have taken to combat slavery and human trafficking in their supply chains.

The act does not just apply to UK companies. It will also effect companies incorporated overseas as long as they carry out business, or supply goods and services to the UK.
SME owners and boards need to be aware that they may be asked by large clients to provide a modern slavery policy voluntarily, as part of the client’s compliance with the Modern Slavery Act 2015.Thoroughly checking and monitoring your company’s outsourced recruitment, subcontracting and ad hoc hiring practices is a critical step often overlooked by employers.  A recent study reveals that most incidences of forced labour it identified involved workers who were not part of the business’s core workforce and may only have been on site for a matter of days.
Can you trace the origin of your short term and part time employees as well as your products?   Click below for some questions you need to ask your suppliers and tips on the warning signs to out for.Contact us if you want to find out exactly what the Modern Slavery Act 2015 requires of your business and your clients, or if you need to create a anti-slavery policy. We can ensure you have a policy that meets the requirements of any compliance department and that you know what to look for going forward to keep your policy and anti-slavery statement  up to date.
1st April 2017 National Living Wage rise for all working people aged 25 + National Minimum Wage rate rises, and associated rises for the other age bands. Confused by what is NLW, NMW and The Living Wage? we explain all here NLW for 25 yrs + raised to £7.50 p.h (up from £7.20)
 April 2017 The Apprenticeship Levy
The government has committed to 3 million what they call “new apprenticeship starts” in England by 2020.From April 2017 all UK employers in the private and public sectors that have annual wage bills of more than £3 million will have to pay an apprenticeship levy of 0.5% of their monthly wage bill.These funds will be used to pay for new apprenticeships. The majority of employers won’t qualify to pay the Levy.From May 2017, non levy-paying employers can “co-invest”, i.e share the cost of training and assessing apprentices with the government. Companies can pay 10% towards the cost of apprenticeship training, and the government with pay the rest (90%),  up to stated funding band maximums.
Large Companies will need to pay the levy from May 2017, and notify HMRC each month if they are eligible to pay.For best ROI:

  1. Scope what kind of apprentice role/s  by function (not sector).
  2. Contact The National Apprenticeship Helpline 0800 015 0600 who will explain how apprenticeship funding works and will help you.
  3. Find apprentice training providers.
From May 2017, non-levy paying employers can “co-invest” i.e share the cost of training apprentices with the government.Read Support with apprenticeship costs for non-levy paying employers and go through steps 1-3 above.
2nd April 2017 Changes to Statutory Sick Pay (SSP),Statutory Maternity Pay (SMP) Maternity Allowance (MA), Statutory Shared Parental Pay (ShPP) & Statutory Adoption Pay (SAP).

This means that from 2nd April 2017, SMP, ShPP, SAP, are payable at 90% of the employee’s average weekly earnings for the first 6 weeks, and the remainder (33 weeks for SMP, for SAP the remainder of the adoption period) is paid at the rate of £140.98 or 90% of average weekly earnings if this is less than £140.98.
SSP raised to £89.35 per week Calculate SSPSMP, SPP, ShPP & SAP rate harmonised and raised to £140.98 per weekCalculate SMP, SPP, SAP
From April 2017 Salary Sacrifice Schemes tax changes The government is withdrawing tax benefits for: company cars (except ultra-low emission vehicles) work-related training, workplace parking, private health schemes, health screening checks, mobile phone contracts, gym memberships and school fees.The government has preserved the following salary sacrifice schemes: pension contributions and advice, child-care, cycling to work and ultra-low emission cars. This will be unwelcome news for staff with salary sacrifice schemes in place who will lose these tax benefits from April 2017.Check your staff packages so you can explain the effects of these changes on individual employees.Arrangements made before April 2017 will be protected until April 2018.Arrangements for company cars, accommodation and school fees will be protected until April 2021.
-now deferred to end 2017  Tax Free Childcare Scheme The government plans to remove the current system of childcare vouchers and introduce a new tax-free childcare scheme. Likely deferred until late 2017. This is so important to working parents. When it comes, ensure they know of the change and its effects.
1 April 2017 – February 2018 Workplace Pensions The rollout of pension auto enrolment continues and 2017 is the year when many businesses have their staging date – the date when they need to set up workplace pensions for their employees. We recommend 6-9 months of planning time for this. Companies with up to 30 employees have a deadline of 1st April 2017.New employers have a few more months.Read our guide to Workplace Pensions for SMEs and Recent Employers here All employers will need to have staff enrolled by February 2018.This involves:

  • Choosing the right pension scheme providers.
  • Amending the payroll.
  • Conducting test payments

Remember to communicate to staff that this is in effect a pay rise for them.

Expected after 23rd June 2016  Shared Parental Leave extends to Grandparents The government has plans to extend shared parental leave and pay to working grandparents by 2018. We will keep you updated on the date of implementation. Inform members of your workforce who are of an age to be grandparents.
Expected after 23rd June 2016 Ban on Corporate Directors At present UK companies are allowed to have corporate directors – these are legal entities such as a company or an LLP – as a director, so long as one director is a real person.  This is changing in 2017. If you have a complex company structure which includes corporate directors, you will need to remove these or replace them with a real person within a year of this law coming into force.

 

 Brexit Update

Latest: Brexit negotiations started on 19th June, and Britain and the EU are now into the negotiation phase.

Employment Tribunal Fees

On 26th July  2017, following a decision by the Supreme Court,  the government abolished the fees for bringing claims in ET courts. In its review on ET fees published in early February 2017, the government had concluded in favour of continuing the fee system whilst promising to address “areas of concern” primarily by extending the fee remission scheme (for which applications had been far fewer than expected) and announcing an immediate exemption from fees for claims for redundancy payments where an employee is redundant. So it is likely that some form of payment for bringing claims to an ET or EAT will be reintroduced at a later date, watch this space.

Employment Status of Workers

Total employment broken down by employee/self employment 1997 - 2016 source ONS From The Legal Partners

Source ONS

CIPD research estimates that there are 1.3 million people, 4% of working adults, working in the “gig” economy. The CIPD research also suggests that the gig economy  will continue to grow, with 12% of working age adults who have not yet participated in gig economy work in the last year saying that they are thinking about trying different forms of gig economic activity in the year ahead.

The Taylor report noted that just under a million people, 905,000, 2.8% of those in employment are reported to be on a zero hours contract. 18% of those on ZHCs are in full time education, suggesting the flexibility of such contracts is a benefit to students.

The number of self-employed people has doubled over the last four decades, up from 7% of the UK labour market in 1979, to 12% in 1990, and to 16% in 2016.

 

Gender Pay Gap Reporting

The gender pay gap refers to the differences in average pay between men and women across an organisation, or the labour market, over a period of time, no matter what their role is.

It is worked out using most common hourly earnings figures for UK employees: see a simple worked example below.

This is different from “equal work for equal pay” which has been law since The Equality Act 1970.
How to calculate a gender pay gap in your orgnisation a worked example from The Legal Partners

For example, Gender Pay Gap reporting may show that on average men earn 36.8 % more pay per hour than women (as in the worked example here), that men earn 5% more in bonuses per year than women, or that the lowest paid quarter of the workforce is mostly female (which is also the case in our example). If you have more men than women in senior positions within your organisation, the organisation will show a gender pay gap.

 

 

General Data Protection Regulations

Please contact me for more details on this and HR data.

Modern Slavery Act 2015

Key questions to ask when assessing your supply chain involve getting to know thoroughly the background of the products and services you supply, the products and services you use in your offices, and the origins of the staff you hire on an ad hoc basis.
Here are a few:
How extensive is our supply chain we consider everything we purchase?
Where do our suppliers source these products?
Where are the products manufactured and with what raw materials?
From where do we procure our office supplies?
How to we employ local suppliers like clean staff. How do we employ ad hoc and non-permanent workers? If through an agency, how are they recruited and treated?
In what type of industries do our clients do business and where?

Modern Slavery Act Checking your Supply Chain The Legal Partners
The government has recently updated its guidance on Transparency in Supply Chains.
Home Office guidance for Business: Transparency in Supply Chains, a practical guide.
Vinciworks’ helpful online tutorial on The Modern Slavery Act and preparing a statement.
CIPS’ publication Tackling of Modern Slavery in Supply Chains Guide

 

 

Tax-Free Childcare Scheme

Under this new scheme, working families will be able to claim 20% of qualifying childcare costs for children under 5yrs (and children with disabilities under 7yrs) – in each case up to a cap of £2,000 per child, per year. The Scheme will be available for all families in which parents in the household are earning £50+ per week. There are exceptions if one family member is an additional rate tax payer, the family won’t be eligible.  Expect the scheme to be implemented in early 2017. The consultation is expected to cover also options for streamlining the Shared Parental Leave and Pay system, including simplifying the eligibility requirements and notification system. Delayed until the later part of 2017.

Ban on Corporate Directors

As part of the government’s initiative to increase transparency in determining who owns and controls UK companies, the Small Business and Employment Act 2015 introduced a ban on corporate directors which was expected  to come into force from October 2016 onwards. The ban prevents UK companies from appointing any new corporate directors, with some exceptions, from the implementation date (expected October 2016 but still not implemented). Companies will have 12 months from the implementation of the ban to remove or replace their corporate directors with real people. It will be a criminal offence (punishable by a fine) to appoint a corporate director after the implementation date. The corporate director in question and any company officers can be personally liable for failing to comply.

The Apprenticeship Levy

The government is looking to big organisations to fund its drive to train 3 million new apprentices by 2020 and to redress the decreasing focus in recent years on employee training outside of the workplace. From April 2017 all UK employers in the private and public sectors that have annual wage bills of more than £3 million will have to pay 0.5% of their total wage bill, minus £15,000, as a levy to fund Apprenticeships. Companies which have registered and paid the levy will then be able to access funding for training though a “digital apprenticeship service account”. Companies can use their vouchers to select and pay for government approved training providers and to post apprenticeship vacancies. For every £1 these companies put in, the government will put in £1.10. Businesses will have 24 months to spend their vouchers. Click here for details, or contact the National Apprenticeship Service helpline on 0800 015 0600. The plan is to roll out this service to all companies by 2020. There are extra funds available for business offering apprenticeships for the young (16 – 18 yr olds), for those with Special Educational Needs and for those who have been in care.

Salary Sacrifice Schemes, tax changes

The Treasury is keen to claw back lost income tax and national insurance contributions as a result of company salary sacrifice schemes. The most popular benefits claimed by staff through these schemes are pension contributions, health insurance, gym membership, company car and bicycle schemes.  If you have these schemes in place, your staff will be affected. Arrangements made before April 2017 will be protected until April 2018. Arrangements for company cars, accommodation and school fees will be protected until April 2021. As stated, ultra-low emission cars, pension savings and advice, childcare vouchers and the cycle-to-work schemes will all be excluded from the change.   Other untaxed benefits – such as where salary is exchanged for extra annual leave or flexible working hours – also will not be affected by the change.

Changes to Statutory Sick Pay(SSP), Statutory Maternity Pay(SMP)

From 2nd April 2017, there will be a new harmonised rate for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay and Statutory Adoption Pay of £140.98 per week or 90% of an employee’s average earnings if this is lower than the statutory rate. From 6th April 2017, the rate of Statutory Sick Pay is also increasing from £88.45 a week to £89.35. The same qualification criteria apply to receive these statutory payments. To be entitled, the employee’s average earnings must be equal to or more than the lower earnings limit. The lower earnings limit is increasing from £112 to £113 in April 2017.

Workers representation on boards

The government has said it will propose employee representation on company boards. As yet there are no real details and again we will report on this as they emerge.

Shared Parental Leave extends to Grandparents

The new system will help support working families, as the government recognises the crucial role grandparents play in providing childcare. Evidence suggests that nearly 2 million grandparents have given up work, reduced their hours or taken time off to help cut down childcare costs.

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