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What does 2017 hold for employment law?
Most employers this year will be considering how employment law will change as we start our negotiations to leave the EU, and while we cannot predict how this decision will impact employment law at this stage, there are certain areas that we can foresee. Howard Robson, Partner in the Employment team, here explains what employers should be looking out for this year, and how they can plan now to avoid possible claims.
Employment status
Following on from the Aslam and others v Uber BV and others case last year, Maggie Dewhurst, a bike courier with City Sprint, has this month won her case to be treated as a worker, rather than a self-employed contractor. This means as a worker she is now entitled to certain rights such as paid holiday and sick leave and the national minimum wage. “The consequences of both this and the Uber case should make all employers review their employment contracts and contracts with self employed contractors to ensure there are clear distinctions,” explains Howard. “It’s likely these will not be the only cases we see of this nature.”
Gender Pay Gap Reporting
On 6 April 2017, the Equality Act 2010 (Gender Pay Gap Information) Regulations will come into force, meaning all private sector businesses with at least 250 employees must publish details of their gaps in pay between genders, for both basic pay and bonus payments. Businesses will have a year to publish their first report, and then must be submitted each subsequent year.
This coincides with the case Brierley and others v Asda Stores Ltd, during which Asda lost an equal pay claim brought by female workers who claimed their work was equal to male warehouse workers. “Even if your business does not employ over 250, reviewing your gaps in pay is a useful exercise to evaluate the likelihood of any equal pay claims that can be brought against you, and to see where any amendments could be made,” continues Howard. “It is likely that gender pay reporting will filter down to all business, irrespective of size, in years to come”.
Holiday Pay
Last year, the Court of Appeal ruled that holiday pay should be ‘normal pay’ and include contractual results-based commission in the case of Lock and others v British Gas. British Gas has since appealed the decision, which is expected to be heard in March, but in the meantime the ruling still stands and employers should be looking at extra payments regularly made to employees to establish which are to be included within ‘normal pay’ and so be included in holiday pay calculations.
“This will be a complex process, and one that is important to get right,” explains Howard. “Businesses should not wait to see the result of the British Gas appeal, but should be preparing now as any amendments that need to be made will be vast, and without doing so, employers could be leaving themselves open to holiday pay claims from employees.”
Modern Slavery Act
The Modern Slavery Act 2015 was introduced in October 2015. This requires businesses that have a minimum turnover of £36million per year to prepare a slavery and human trafficking statement for each financial year, applying to financial years ending on or after 31st March 2016.
The statement should include either:
- Details of the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains or in any part of its own business; or
- A statement that no such steps have been taken.
Apprenticeship Levy
The Apprenticeship Levy is due to be introduced on 6 April 2017, and will require businesses with an annual wage bill of over £3million to contribute 0.5% of that wage bill into a fund to be used towards the training of apprentices. “While the initial levy is only for those businesses with a larger wage bill, the structure of providing funding to smaller businesses is also due to change in the coming months,” continues Howard.
Salary sacrifice schemes
From April 2017, there will be changes to the tax status of salary sacrifice benefits. The changes will see an end to the tax saving benefits of most salary sacrifice schemes, which will become subject to the same taxation as cash income. Any schemes in place before 6 April 2017 will be protected for one year, or four years in the case of cars, accommodation or school fees. The extension will apply until the arrangement ends, is renewed or otherwise modified. Pensions and related advice, cycle-to-work and ultra-low emission cars will remain exempt from tax.
Tax-free childcare
Existing employer-support childcare voucher schemes will also retain their tax benefits. The Government is expected however to launch a new, alternative tax-free childcare scheme, which will allow working families satisfying a minimum/maximum income requirement to claim 20% of childcare costs for children under 12, or under 17 where they have a disability, capped at £2,000 a year. The two schemes can run in tandem, but once a new scheme has been established no new employees will be allowed to join an old-style childcare voucher scheme and still receive the tax benefits.
“It’s clear that there are many changes due this year, all of which employers should be making preparations for now,” concludes Howard. “While there are no guarantees as to the changes Brexit may also bring, employers could start considering whether their EU national employees may be affected.”
If you would like advice on any of the changes mentioned in this article, you can contact Howard or the Employment Team on 02380 717717 or email employment@warnergoodman.co.uk.
ENDS
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.