New Employment Laws 2017 explained

Posted by : | 6th Jan 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 a momentous decision in July from the Supreme Court, ruling that tribunal fees were unlawful, to much media commentary and chatter on Brexit, Immigration, the Taylor report, the BBC’s Gender Pay Gap story, the “Gig” economy cases; it all makes for an emotive mix of topics which will be discussed in UK offices up and down the country as staff and colleagues return to work from their summer break. Cutting through the confusion, below is an update of what’s important in terms of Employment law:

  • 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 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.We keep our subscribers updated on the latest developments and what they mean for business, so to stay on top of it all, make sure you have subscribed to our updates by clicking the sign up now button in the column to the right of this article.

Click on the headings in the table to find more details on the topic discussed later in the article. The “Next Steps” column highlights some initial actions you can take.

 ..This article is being revised and updated for Q4 1017, please get in contact to be sent the latest version….

New Employment Laws 2017 explained:  what they mean for business


Date New Laws for 2017 Next Steps
26th July 2017 Employment Tribunal Fees
In a hugely significant overturn judgment 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 outsetFees were introduced in 2013, and ranged from £160 up to £1,200.There had been a dramatic fall in the number of ET claims since the Fees Order came into force, a reduction in cases of 66-70%.
Its planned that fees already paid under the scheme will be reimbursed by the government.

In 2016, The Court of Appeal had dismissed UNISON’s challenge to the introduction of these fees.

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, possibly to levels seen before the current fees were introduced.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.

UNISON, who challenged the Fees Order at the Supreme Court, and other Unions can rightly expect their costs for bringing claims on behalf of union members to decrease accordingly from July 26th  onwards.

 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 possibly, to tackle the issues created by an underlying shift towards less permanent work.  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 claim 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 gap, and to reveal the number of men and women in each pay range, to show where pay gaps are at their widest.
Let’s be clear on what the gender pay gap is in this context.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 recent 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.

This is different from “equal work for equal pay” which has been law since The Equality Act 1970.

Employers with over 250 people 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. 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 large companies to produce a slavery and human-trafficking statement for each financial year ending on or after 31st March 2016.Companies with turnover in excess of £36 million are required to disclose what steps they have taken to ensure slavery and human trafficking are not taking place in their organisations or in any of 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.

What is modern slavery?


 A modern slavery policy is not only for large organisations.Large companies will check that their suppliers have them. They in turn in turn will check their suppliers, and on it goes through the B to B supply chain.SME owners and boards need to be aware that you will be asked by your larger clients to provide a modern slavery policy as part of their compliance with the Modern Slavery Act 2015.

Click below for some questions you need to ask your suppliers and tips on the warning signs to out for.

Contact us if you need a modern slavery policy for your business.

We can ensure you have a policy that meets the requirements of any compliance department and you know what to look for going forward to keep it up to date.

1 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 new apprenticeship starts in Englandby 2020.From April 2017 all UK employers in the private and public sectors that have annual wage bills of more than £3million 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.
 April 2017 Changes to Statutory Sick Pay (SSP),Statutory Maternity Pay (SMP) & Maternity Allowance. Statutory Shared Parental Pay (ShPP) Statutory Adoption Pay (SAP)This means that from 2nd April 2017, SMP, ShPP, SAP, is payable at 90% of the employee’s average weekly earnings for the first 6 weeks, and the remainder (33 weeks for SMP, for adoption 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 weekCalculate 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 the 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.

 Early 2017 -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 1 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. Process involves:-Choosing the right pension Scheme providers-Amending the payroll

-Conduct 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.

Great Repeal Bill.

1. Employment Tribunal Fees

On July 26th 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.

2. The Employment status of workers.

In purely financial terms the current “gig”economy is tiny. Without accurate data (the current Labour Force Survey data available to the authors is very limited) The Taylor Report relies on CIPD research which estimates that there are 1.3 million people, thats 4% of working adults, working in the “gig” economy:  The report cites the CIPD research that suggests a high proportion of gig economy workers (58%) are permanent employees, engaging in gig economy work on top of their more more “traditional” employment, which could indicate that for many this type of work could be additive, “top- up” income.
Further CIPD research bears this out;  with 14% [of 400 “gig” economy workers surveyed] saying they do gig work because they couldn’t find alternative employment, and the most common reason for taking on gig work was to boost income (32%). Nearly two thirds, (63%) of those surveyed, believe the government should regulate to shore up their rights and benefits in line with more traditional forms of working.

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 employment figures of course include those employed on Zero Hours Contracts. 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.

What is more striking is the increase in self-employment.  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.

Meanwhile the tribunal cases around worker status roll on.

The Court of Appeal dismissed the appeal by Pimlico Plumbers and upheld the decision that the people working as plumbers are workers, not self-employed contractors.  This judgement is at least as significant as the Uber case in terms of its implications on future business practice. A senior Court of Appeal decision carries more weight than any judgment of the Employment Appeals Tribunal in the Uber case, which is still to be heard. Pimlico Plumbers has been granted permission to appeal to the Court of Appeal.

3. 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 gap, and to reveal the number of men and women in each pay range, to show where pay gaps are at their widest. Let’s be clear on what the gender pay gap is in this context as media headlines can confuse the issue.

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 recent 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 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: worked example
For example, Gender Pay Gap reporting may show that on average men earn 10% more pay per hour than women, that men earn 5% more in bonuses per year than women, or that the lowest paid quarter of the workforce is mostly female. If you have more men than women in senior positions within your organisation, the organisation will show a gender pay gap.

Companies with over 250 staff must publish these results on their own website and on a Government site.


General Data Protection Regulations

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

Modern Slavery Act 2015

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.

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 £3million will have to pay 0.5% of their total wage bill, minus £15,000, as a levy to fund Apprenticeships. Companies who 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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