1. Carers get right to request flexible work
The Work and Families Act 2006 extends the right to request flexible work to carers of adults from 6 April 2007. The Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2006 provide that an employee may make a request for flexible working if the employee is or expects to be caring for a person who is over the age of 18 and in need of care, and who is either married to or the partner or civil partner of the employee; a relative of the employee; or living at the same address as the employee. This right is subject to a qualifying period of 26 weeks' continuous employment.
2. Increases to statutory benefits
Statutory Sick Pay increases to £72.55 a week from 6 April 2007. Statutory Maternity, Paternity and Adoption Pay increased to £112.75 a week (flat rate) from 1 April 2007 and the lower earnings threshold is now £87 a week.
Under the Work and Families Act 2006, which came into force on 1 October 2006, all employees expecting to give birth or adopt on or after 1 April 2007 will be entitled to statutory maternity/adoption pay for 39 weeks.
The DTI has consulted on its powers under the Work and Families Act to allow additional maternity leave and pay to be transferred to fathers as additional paternity leave and pay. It has stated that this right will be introduced before the end of this Parliament, but not before April 2009, and will come into force at the same time as statutory maternity pay is extended to 52 weeks. The Government has published its response to consultation "Work and Families: Choice and Flexibility" which is available here.
3. Information and Consultation Regulations extended
The regulations implementing the EU Directive on Information and Consultation, known as the "domestic works council" Directive, will apply to businesses with 100 or more employees from 6 April 2007.
4. Obligation to consult on pension changes extended
Regulations requiring employers to consult pension scheme members (or their representatives) before making changes to an occupational or personal pension scheme will be extended to apply to employers with 100 or more employees from 6 April 2007.
5. Statutory dispute resolution procedures extended
The statutory dispute procedures will apply to detriment relating to employees of European Public Limited Liability Companies, Information and Consultation employee representatives and Occupational and Personal Pension scheme employee representatives from 6 April 2007. The statutory dismissal and disciplinary procedures shall apply to these new jurisdictions where the employer first contemplated taking action after 6 April 2007. The grievance procedures shall apply to the new jurisdictions where the grievance occurred after 6 April 2007 unless the grievance is a continuing matter and the employee has raised it with their employer or has presented a complaint to the employment tribunal before 6 April 2007. 6. Implementation of parts of the Equality Act 2006
The Equality Act 2006 provides that a single Commission for Equality and Human Rights will be established in October 2007 to take over functions from the EOC, DRC and CRE in October 2007. The Equality Act also clarifies that existing laws on religion or belief discrimination shall cover lack of a religion or belief. We are still awaiting a draft commencement order but we understand that this change will come into force on 30 April 2007.
The Equality Act will also introduce a new duty on public bodies to promote gender equality from 6 April 2007 which will require public sector bodies to draw up a scheme identifying gender equality goals by 30 April 2007; develop, publish and regularly review a policy on equal pay arrangements; and assess the impact of new legislation, and changes to policies, employment and service delivery. The EOC has prepared a Code of Practice on the Gender Equality Duty which will come into force on 6 April 2007. The Code of Practice gives practical guidance to public authorities on how to meet their new obligations. A copy is available here.
7. Company law developments
The Companies Act 2006 received royal assent on 8 November 2006 and represents a complete overhaul of UK company law. Many aspects are deregulatory, and will simplify the law, particularly for private companies. However, there are concerns that other provisions, for examples those relating to the new codification of directors' duties, will lead to additional complexity, uncertainty and cost. Certain parts of the Act, in particular those relating to the Transparency Directive, the Takeover Directive and shareholder communications came into force in January or will come into force this April 2007. The bulk of the rest of the Act will be brought into force on staggered commencement dates - October 2007, April 2008 and October 2008.
The key provisions of the 2006 Act which came into force in January or will come into force this April 2007 and which impact on directors are set out below:
New safe harbour provisions: the new safe harbour provisions in respect of directors’ liability for statements in the directors’ report, the remuneration report and summary financial statements derived from those reports came into force on 20 January 2007. These provisions cover any reports issued after 20 January 2007, irrespective of a company's financial year end. Under the new statutory liability regime for periodic financial information introduced by the Companies Act 2006 as new section 90A Financial Services and Markets Act, only the issuer will be liable to compensate an investor who acquires securities and suffers loss as a result of an untrue or misleading statement or omission in a relevant financial publication. An issuer will be liable to investors where a director knew, in the case of a statement, that it was untrue or misleading or was reckless or knew, in the case of omission, that it was a dishonest concealment of a material fact. The director will only be liable to the company (and not to any third party) in relation to statements which are untrue or misleading and which are made in bad faith or recklessly or there is deliberate and dishonest concealment of material facts.
Interests in shares: the Transparency Directive was also implemented in the UK from 20 January 2007 and the new Disclosure and Transparency Rules now govern the thresholds and manner of disclosure of substantial interests in shares. Sections 198-220 of the Companies Act 1985, including provisions on the disclosure of material interests and company investigation powers, were repealed from 20 January 2007 and the corresponding provisions in the Companies Act 2006 came into force on that day. The DTI has issued an Implementation Briefing which contains useful guidance on the detailed differences between the section 212 provisions and the Part 22 provisions.
Disclosure of directors' interests provisions in the Companies Act 1985 dealing with the disclosure of directors' interests will be repealed from 6 April 2007. For listed companies, directors and their families will continue to have disclosure obligations under the Disclosure and Transparency Rules whenever they deal on their own account in shares or derivatives of the company concerned.
Age limits for directors the 70 year age limit for directors in sections 293 and 294 of the Companies Act 1985 will also be repealed with effect from 6 April 2007 and such limits should be removed from company's articles at the next AGM. On a slightly separate point, consideration should also be given to removing directors' ages from annual reports. Although the mere disclosure of age would not, in itself, be discrimination, it could be used in evidence should the individual subsequently suffer a detriment (e.g. not being re-elected) and claim age discrimination.
Miscellaneous sections on tax-free payments to directors (section 311 Companies Act 1985) and prohibition on directors' dealings in share options (section 323 and 327 Companies Act 1985) are also being repealed on 6 April 2007
Provisions relevant to directors which are due to come into force in October 2007 include most of Part 10 of the 2006 (which includes the new duty to promote the success of the company for the benefit of its members but not the provisions relating to directors' conflicts of interest duties, directors' residential addresses, underage directors and the requirement for all companies to have one natural director which come into force from October 2008). A new statutory procedure for derivative actions (Part 11) will also be introduced from October 2007 together with provisions relating to the new enhanced business review (s.417 Part 15). These will be covered in more detail in a future e-bulletin.
8. New EU Drivers' Hours rules
From 11 April 2007, a new EC Regulation on drivers' hours will come into force which regulates drivers' hours of work, clarifies weekly driving limits, requires more frequent and evenly spread breaks, increases daily rest requirements and updates exemptions and national derogations. For more information see here.
9. Other changes before October 2007
Ban on smoking in enclosed public places
The Government will ban smoking in most workplaces and enclosed public spaces on 1 July 2007. Smoking in designated smoking rooms will no longer be permitted and employers will need to update internal policies and disciplinary procedures, with as much advance notice to employees as possible.
Weekly working time limits for doctors in training
From 1 August 2007, the weekly working time limits for doctors in training will be reduced to 56 hours.