New holiday pay guidance, the latest tribunal statistics, consultation on confidentiality clauses, and the off-payroll rules for the private sector are all covered in this month's Quick fire.

New holiday pay guidance

The Government has published new guidance and an online calculator to assist in the calculation of holiday pay for workers whose hours or pay are not fixed. The guidance is intended to be used by workers or employers.

The guidance follows an independent poll of workers about their perceptions and understanding of holiday pay entitlement, which found that 35% of workers thought that only those engaged in permanent roles are entitled to holiday pay.

It is thought that workers in the UK are missing out on an estimated £1.8bn in holiday pay each year. The Government has also launched its first holiday pay advertising campaign, ‘It comes with the job’, to raise workers’ awareness of their rights, and to help employers to understand their legal obligations.

Latest tribunal statistics

The quarterly tribunal statistics (October to December 2018) have recently been published, showing that the volume of employment tribunal claims has continued to rise since the abolition of tribunal fees.

The number of single claims received by the employment tribunals increased by 23% when compared with the same period of 2017. The outstanding caseload has increased by 53%, reflecting our own experiences of continued resourcing issues within the employment tribunals, meaning lengthy waits for hearings (particularly multi-day hearings). Of cases disposed of during the quarter, the majority (29%) were Acas-conciliated settlements, with only 8% of claims successful at a hearing.

Receipts of multiple claims have decreased significantly, down 78% from the same period last year. Applications for fee refunds, following the abolition of fees in the employment tribunals in July 2017, have also seen a marked reduction.

Consultation: confidentiality clauses

The Government has published a new consultation on the use of confidentiality clauses, aimed at preventing their misuse in relation to workplace harassment or discrimination.

The consultation follows the Government’s response to the Women and Equalities Select Committee report (see our previous Quick fire item, January 2019), in which it had indicated that it would consult on how to better regulate the use of ‘non-disclosure agreements’ (NDAs).

The legitimate use of confidentiality clauses, for example to protect trade secrets and other confidential business information, is not in question. The Government is seeking evidence of the use of confidentiality clauses in the employment context, and examples of clauses that seek to restrict an individual making disclosures to appropriate agencies. Such clauses could be included in an employment contract or a settlement agreement.

The Government is proposing the following measures to prevent the ‘unethical use’ of such clauses:

  • making it clear that employees are free to make disclosures to police, and potentially to other individuals (such as doctors and therapists)
  • introducing additional requirements for legal advice to be provided on the meaning of a confidentiality clause, without which the clause would be deemed void
  • prescribing that certain elements must be included in confidentiality clauses (the Government will consider whether prescribed wording is required)
  • limiting the use of confidentiality clauses in employment contracts, making it clear that certain disclosures are permitted.

There is no suggested timescale for these changes to be implemented, but if and when they are, employers will be required to review the contents of their existing employment contracts and settlement agreement wording. The consultation closes on 29 April 2019.

Consultation: off-payroll working

The Government has published a new policy paper and consultation document on extending the off-payroll working rule (also known as IR35) to the private sector from 6 April 2020.

The off-payroll rules for the private sector will be based on existing rules in the public sector, which came into force in 2017. Under the proposals, if a private sector client determines that a worker is a ‘deemed employee’, the fee-payer (e.g. the agency paying the worker’s personal service company) must account for and pay tax, National Insurance contributions and the apprenticeship levy as if the worker was an employee. The intention is to ensure that individuals who work like employees pay broadly the same employment taxes as employees, regardless of the structure they work through.

The consultation is intended to provide organisations and off-payroll workers with greater certainty around how the new rules will operate, and the obligations and responsibilities of the various parties involved in the labour supply chain.

Certain changes are proposed to the existing public sector rules, including requiring the client to provide the status determination directly to the individual worker, and on request, the reasons for the determination, as well as requiring clients to implement a process for resolving status disputes.

It is proposed that small organisations, with fewer than 50 staff and/or a turnover of less than £10.2m, will be exempt from the new rules. Whether an organisation has to meet both or either of these criteria will be decided following the consultation.

The consultation closes on 28 May 2019.