As always a number of employment law changes are due to take place in April. Whilst the introduction of the National Living Wage is the most significant, below is a brief summary of all the key changes which employers should be aware of, together with a note of other developments to look out for during the year.
National Living wage
From 1 April 2016 the National Living Wage will replace the existing National Minimum Wage for all workers aged 25 and over at a rate of £7.20 per hour. The current minimum wage will still apply for workers age 24 and under.
In addition, the penalties for employers who fail to pay the National Minimum Wage and National Living Wage are doubling from 1 April. The penalty will rise from 100% of arrears to 200%. This will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged.
Increase to compensation limits
A number of compensation limits change with effect from 6 April:
- A week’s pay used to calculate statutory redundancy pay increases from £475 to £479 per week.
- The maximum compensatory award for unfair dismissal increases from £78,335 to £78,962.
There will be no increases to statutory maternity, paternity, adoption or shared parental pay, maternity allowance or statutory sick pay for 2016/2017.
Our checklist contains all the key payments and limits for 2016/2017
Public sector exit payments
The Repayment of Public Sector Exit Payments Regulations 2016 come into force on 1 April. These regulations require a high earning public sector worker to repay an exit payment if they are re-employed in the public sector within a 12 month period. The threshold for a ‘high earner’ is set at £80,000 and tapering provisions will apply.
Additional changes in the public sector include the capping of exit payments at £95,000 (likely to be introduced in October 2016). The cap will apply to the vast majority of payments such as voluntary and compulsory redundancy, special severance payments and pay in lieu of notice.
Following consultation by the Government published in January 2015, new rules on the ability to postpone tribunal hearings will be introduced from 6 April. In summary:
- Where a tribunal hearing has already been postponed on two occasions by the request of the same party, any further applications for a postponement (by that party) will only be granted in exceptional circumstances.
- Applications for a postponement must be made at least seven days before the hearing, other than in exceptional circumstances.
- In the event a postponement application is made less than seven days before the hearing a tribunal must consider a costs or preparation time order against the party that is granted the late postponement (although there’s no obligation to make an order).
The Government also intends to introduce penalties where any tribunal award or settlement remains unpaid. The penalty notice will be 50% of the outstanding amount subject to a £100 minimum and £5,000 maximum. The money is payable to the Secretary of State.
Under the Modern Slavery Act 2015 introduced last October, it became a legal requirement for organisations with a global turnover of £36million or above to prepare a slavery and human trafficking statement for each financial year. The first organisations that need to produce a statement are those whose financial year ends on 31 March 2016. Their statements relating to the current year (2015-2016) will be due as soon as possible, suggested as no later than six months after the financial year end to which it relates. Working to this suggested timeframe, the first target is 30 September 2016.
For further information read our guidance on the Modern Slavery Act
Other changes to look out for in 2016
Trade Union Bill
Key reforms under the Trade Union Bill relate to strike ballots and include:
- A requirement for a minimum turnout of 50% of those entitled to vote before a ballot will be lawful (currently only a simple majority is required).
- The support of at least 40% of those eligible to vote (as opposed to those actually voting) in the case of industrial action affecting essential public services such as health, fire and education.
For further information on trade union reforms read our blog
The Immigration Bill is currently before Parliament with the key driver being the prevention of illegal working and the exploitation of migrant workers through the introduction of tougher sanctions on employers.
Read our latest blog on this topic
Gender pay gap
The Government’s consultation on gender pay gap reporting closed in September 2015 and the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 are expected to come into force on 1 October 2016. Employers with 250 or more employees will be required to publish gender pay gap details highlighting the differences in gross pay and bonus payments between male and female employees.
For further information read our latest blog
New whistleblowing rules in the financial services sector
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have published new rules on whistleblowing for firms operating in the financial services sector. These are part of a wider policy of reforms designed to improve individual accountability in the regulated sector. The rules are intended to build on and formalise the good practice already in place in many firms in the sector and will come into full effect in September 2016.
Our latest blog provides a summary of the key changes