Employment law continues to be a political area and, as ever, there will be a number of important changes to the employment law landscape this year. Additionally, we are expecting a number of key case law decisions. In this article we highlight some of the major changes and decisions to look out for.
National living wage
The new national living wage is due to come into effect on 1 April 2016. This will mean that workers aged 25 and over will receive an additional premium on top of the national minimum wage and, from 1 April, this will result in a national living wage for those workers of £7.20 an hour.
It has been estimated that around 50% of employers will need to increase pay for some employees as a result of this change. Such employers will need to plan ahead and decide how they will deal with the increase in wage costs.
On the same date, penalties for a failure to pay the national minimum wage or living wage will double and company directors can be disqualified for failing to pay the correct amount.
Gender pay gap reporting
Another long trailed employment law development, gender pay gap reporting, is due to be introduced this year. It is expected to come into force on 26 March. All employers who employ 250 or more employees will need to publish information on the gender pay gap in their workforce.
The Government consulted on the detail of this proposal, such as where companies will need to publish information and how frequently it will need to be published, in the summer of 2015. We are still awaiting the outcome of that consultation. However, the Government announced in November 2015 that the reporting requirements will cover public sector as well as private sector employers and will include bonuses as well as basic pay.
We will provide more information once we know the detail of the obligations with which employers will need to comply. Given that draft regulations have not yet been published, it is possible that the introduction date may be delayed.
Slavery and human trafficking statements
From 31 March 2016 onwards, every organisation with a global annual turnover of £36 million or more that carries on a business in the UK will have to publish a statement on its website setting out the steps it has taken to ensure that there is no slavery or human trafficking in its business and supply chains. Alternatively, it can state that it has taken no such steps, although to do so would risk negative publicity.
Whilst this is not a pure employment law matter, HR professionals may find themselves becoming involved in preparing these statements, drafting policies and organising training for staff.
Public sector employers
The Government has recently launched a consultation on draft regulations allowing for the recovery of exit payments made to public sector employees who subsequently return to the public sector. The consultation on the draft regulations will run until 25 January 2016. You can read the consultation paper here.
The proposed regulations will apply to public sector employees who earn in excess of £80,000. If they return to any qualifying part of the public sector within 12 months of the termination of their employment, they will have to repay a proportion of any exit payment they have received. The regulations will apply to almost all public sector organisations, with the main exceptions being nationalised banks, broadcasters and financial regulators. This new provision is expected to come into force in April.
Financial services employers
The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have issued policy statements on whistleblowing in banks, PRA-designated investment firms and insurers. These set out rules designed to increase whistleblowing in the sector and create a culture where employees are not afraid to come forward and express their concerns.
The main rules come into effect for affected businesses on 7 September 2016 but, by 7 March 2016, all affected firms need to have appointed a senior manager as a "whistleblowers' champion". Firms will also need to:
- Establish internal whistleblowing channels and inform staff about them;
- Inform staff about the whistleblowing services of the PRA and FCA and about the legal protections that apply to whistleblowing;
- Ensure the wording in employment and settlement agreements does not deter staff from whistleblowing; and
- Present a report on whistleblowing to the board at least annually.
Other potential developments
We do not have a definite date yet but 2016 could also finally see the introduction of regulations to outlaw caste discrimination, and proposals to cap public sector exit payments at £95,000 may come into force this year as well.
Cases to note
This year will also see a number of important employment law cases coming before the courts. HR professionals should look out for:
- Moran and others v Ideal Cleaning Services Ltd – in March the Court of Appeal will hear this case, in which the EAT found that agency workers supplied to a hirer for between six and 25 years were not covered by the Agency Workers Regulations because their appointments were effectively permanent.
- BT Managed Services Ltd v Edwards – the Court of Appeal is due to hear this case in June. The EAT held that an employee who was absent from work on a long term basis and unlikely to return was not part of an organised grouping of employees and would not therefore transfer under TUPE on a service provision change. This was a surprising decision to some TUPE practitioners and it will be interesting to see if it is overturned by the Court of Appeal.
- Chesterton Global Ltd and another v Nurmohamed – the Court of Appeal will hear this case in October, which concerns the meaning of 'in the public interest' in relation to whether or not a worker has made a 'protected disclosure' giving him whistleblowing protection. The EAT's decision was that a disclosure did not need to be in the public interest as a whole, just in the interest of a section of the public. Accordingly, a disclosure that affected a number of employees could be protected.
We may also see a decision from the Court of Appeal in the long running case of United States of America v Nolan on when an employer's duty to collectively consult over a redundancy exercise arises. However, we do not yet have a date for the hearing.
2016 is shaping up to be a busy year in employment law, with plenty of legislative developments and new case law on the horizon. We will continue to report on new pieces of legislation and important decisions through our weekly briefings and will cover recent cases and what's in the pipeline, as well as other topical issues, at our regular seminars. Dates for our seminars are already in place; take a look under the useful links section on this page.