The Government commissioned the Independent Review of Employment Practices in the Modern Economy (known as the Taylor Review) in 2016. The report was published in July 2017 and made various recommendations in relation to worker rights. The Government carried out a number of consultations on proposed reforms during 2018.
Date Topic Practical Impact Summer 2017 onwards Employment Status ● The Government commissioned the Independent Review of Employment Practices in the Modern Economy (known as the Taylor Review) in 2016. The report was published in July 2017 and made various recommendations in relation to worker rights. The Government carried out a number of consultations on proposed reforms during 2018. ● In December 2018, the Government published a policy paper, the Good Work Plan, setting out a number of reforms aimed at improving the position of workers including: - a right for zero-hours workers to request a more stable contract - refining the employment status test and developing an online employment status tool - making it easier for casual workers to establish continuity of employment (by increasing the gap required between contracts for breaking continuity from one week to four weeks). ● Some of the changes do not yet have an implementation date, but those which do are detailed below. ● The Government is currently consulting on specific measures to improve protection for zero hours workers including proposals for compensation for cancelled shifts, minimum notice of working hours and the right to move onto a fixed hours contract. The consultation closes on 11 October. ● A new European Directive requires EU countries by August 2022 to implement protections for zero-hours workers, and other workers with unpredictable working patterns, some of which
Summer 2017 onwards
Topic Employment Status
The Government commissioned the Independent Review of Employment Practices in the Modern Economy (known as the
Taylor Review) in 2016. The report was published in July 2017
and made various recommendations in relation to worker rights. The Government carried out a number of consultations on
proposed reforms during 2018. In December 2018, the Government published a policy paper,
the Good Work Plan, setting out a number of reforms aimed at improving the position of workers including: - a right for zero-hours workers to request a more stable
contract - refining the employment status test and developing an
online employment status tool - making it easier for casual workers to establish continuity of
employment (by increasing the gap required between contracts for breaking continuity from one week to four
weeks). Some of the changes do not yet have an implementation date,
but those which do are detailed below. The Government is currently consulting on specific measures to
improve protection for zero hours workers including proposals
for compensation for cancelled shifts, minimum notice of working hours and the right to move onto a fixed hours
contract. The consultation closes on 11 October. A new European Directive requires EU countries by August 2022
to implement protections for zero-hours workers, and other workers with unpredictable working patterns, some of which
January 2019 to 2020 onwards
9 December 2019 6 April 2020 6 April 2020 6 April 2020
Financial Services and Insurance Regulation Information and Consultation Employment terms Holiday Pay
the Government is doing as part of the Good Work Plan. Whether the UK has to implement the Directive will depend on the outcome of Brexit negotiations and any transition period. A number of measures to reform corporate governance and pay take effect in 2019. The changes apply to financial years beginning on or after 1 January 2019, so the first reports will be published in 2020. Quoted companies with more than 250 UK employees are required to report pay ratio information in their annual directors' remuneration reports. The pay ratio information needs to compare the total remuneration of the company's CEO with the remuneration of employees at the 25th, 50th and 75th percentiles of the workforce, and provide an explanation of the ratios. Large private companies are required to include a statement about their approach to corporate governance in their directors' reports, including which corporate governance code the company has applied (if any), how it did so and the reasons for any departure from that code. The Financial Reporting Council has published corporate governance principles for large private companies which can be used for this purpose (known as the Wates Principles). The requirement applies to companies that have either more than 2,000 employees or a turnover of more than 200 million and a balance sheet of more than 2 billion. All companies with at least 250 UK employees are required to report on employee engagement as part of their annual directors' reports. The report needs to describe what measures were taken during the financial year to introduce or develop
arrangements for providing information to employees and consulting with them about decisions likely to affect them. Directors also have to explain how they engaged with employees and had regard to their interests, and how this has impacted on key decisions of the company. The Corporate Governance Code for premium listed companies has been revised and changes include: - new measures for employee engagement at board level - a specific requirement for effective whistleblowing
procedures and reports to the board - additional measures to promote culture and diversity. In March 2016, the Senior Managers and Certification Regime (SMCR) replaced the approved persons regime for employees in banks, building societies and other financial services organisations jointly regulated by the FCA and PCA. An equivalent regime was brought in for large insurers. The SMCR was extended to all insurers in December 2018 and will be extended to all FCA regulated firms on 9 December 2019. Currently, employers (with 50 or more employees) are required to set up a national works council for informing and consulting employees, if at least 10% of employees request this (subject to a minimum of 15 employees). This threshold is to be reduced to 2% from 6 April 2020, as part of the Good Work Plan (see above). All workers will have the right to a written statement of terms on the first day of employment. Currently a statement of terms need only be provided to employees (and not workers) within two months of employment starting. This change is being introduced as part of the Good Work Plan (see above). Currently holiday pay for a workers with variable hours or pay is
calculated by taking an average of pay over the previous 12 weeks. This lookback period will be increased to 52 weeks, from 6 April 2020, as part of the Good Work Plan (see above).
6 April 2020 6 April 2020 6 April 2020
National Insurance Contributions and Termination Payments Tax and Contractors
Pensions Auto Enrolment
Agency workers have the right to receive the same pay as comparable permanent employees after 12 weeks. There is an exception to this right, known as the "Swedish derogation", where the agency worker's contract provides for minimum pay between assignments. The Government has committed to abolish the "Swedish derogation" as part of the Good Work Plan (see above), and will do so on 6 April 2020.
Also from 6 April 2020, agencies will be required to provide agency workers with a Key Information Document detailing the type of contract and minimum pay rates.
Where an ex gratia termination payment is made (on top of notice pay) the first 30,000 can be paid free of income tax and any amount above this is taxable. However, the entire ex gratia payment is exempt from National Insurance Contributions (NICs).
From 6 April 2020, the first 30,000 of any ex gratia termination payment will still be payable free of income tax and NICs, but any amount above this will be subject not just to income tax but to NICs as well. Our note Tax Treatment on Termination Payments contains more detail.
The Government is extending rules on taxing contractors, which already apply in the public sector, to the private sector. The socalled "off-payroll working rules" were introduced in the public sector in April 2017.
Under the rules, where an individual contractor or consultant supplies their services to a public sector client via a personal services company, the client must decide whether the "IR35 legislation" applies. This broadly involves the client asking whether, without the personal services company, the individual would be regarded as an employee of the client for tax purposes. If so, the client (or the body responsible for paying the contractor's company) must deduct income tax and national insurance contributions from payments to the contractor's company.
The rules are designed to ensure that those who work through a personal services company, who would be employees if they were engaged directly, pay broadly the same tax as employees. The extension of the rules to the private sector is due to take effect on 6 April 2020.
All employers are required to enrol in a pension scheme their UK who are between age 22 and state pension age and have earnings in any pay period above the equivalent of 10,000 per year. Minimum contributions are required to be paid on earnings between 6,316 and 50,000 per year. These figures are reviewed annually, with any increases applying from the following 6 April. There are also information requirements and opt-in rights for other workers. See our briefing note "Pensions: Automatic enrolment" for more detail.
In addition to the ongoing automatic enrolment duties, all employers of UK workers are required every three years to reenrol workers who have opted out of their automatic enrolment pension scheme (except in the last 12 months). This is to be done on a date selected by the employer that falls within a six month window period set out in the legislation. An employer's first window period begins three months before the third anniversary of the employer's original automatic enrolment "staging date" and ends three months after the third anniversary. Our briefing note "Automatic re-enrolment" contains more detail.
April 2020 April 2020 April 2020 2020 No date
National Minimum Wage and National Living Wage
Unfair Dismissal and Statutory Redundancy Pay
Statutory Sick Pay Statutory Maternity, Paternity, Adoption and Shared Parental Pay Parental Bereavement Leave Sexual Harassment
Settlement and Confidentiality
Redundancy and Pregnancy/Maternity Leave
The hourly rates of the national living wage (which applies to
workers aged 25 or over) and national minimum wage usually
increase every April. The current hourly rates are:
- 8.21 (for workers aged 25 or over) - 7.70 (for workers aged 21 to 24) - 6.15 (for workers aged 18 to 20) - 4.35 (for workers aged under 18) - 3.90 (for apprentices) The maximum compensatory award for unfair dismissal and the
maximum amount of a week's pay (for calculating the unfair
dismissal basic award and statutory redundancy pay) increase
every April in line with RPI. Currently the maximum
compensatory award is the lower of 86,444 and a year's pay,
and the maximum amount of a week's pay is 525. The weekly rate of statutory sick pay increases in April each
year. The current rate is 94.25 per week. The weekly rates of statutory maternity, paternity, adoption and
shared parental pay increase in April each year. The current
rate is 148.68 per week. Parents who lose a child under the age of 18 will be entitled to
two weeks' statutory leave (paid if the employee has 26 weeks'
service). This new law is expected to come into force in 2020. In spring 2018, the Equality and Human Rights Commission
(EHRC) published a report, Turning the tables: ending sexual
harassment at work, which made a number of
recommendations to strengthen the protection for victims of
sexual harassment. The Government responded in December 2018 and has
committed to develop a statutory code of practice on sexual
harassment. The Government is currently consulting on further
measures to address sexual harassment at work, including: - introducing a new duty to prevent harassment - requiring employers to publish their sexual harassment
policies - introducing specific provisions dealing with third party
harassment - extending time limits for discrimination and harassment
claims from three to six months. Earlier this year, the Government consulted on the use of
confidentiality provisions in settlement agreements in
discrimination and harassment cases. The Government has now
responded to this consultation and stated that it will legislate to: - ensure that settlement agreements will not prevent
disclosures to the police or healthcare or legal professionals - require confidentiality clauses in employment contracts and
settlement agreements to set out their limitations clearly - require individuals to take legal advice on the confidentiality
provisions in a settlement agreement. Employees who are made redundant during maternity leave
must be offered a suitable alternative vacancy if there is one. Earlier this year the Government consulted on whether to
extend this protection to the periods before and after maternity
leave, and if so whether to extend the protection for other types
of family leave as well. The Government has now responded to the consultation and
confirmed that it will extend redundancy protection to begin
when the employee notifies the employer of the pregnancy and
end six months after the end of the maternity leave. The same
extension will apply in relation to adoption leave, and similar
extensions in relation to shared parental leave.
No date No date No date No date
Maternity/Adoption/Shared Parental and Parental Leave Diversity Reporting
Sickness and disability Whistleblowing
The Government is consulting on measures to support working
families including: - how to improve paternity and shared parental leave and
pay, including the possibility of dedicated "pots" of leave for
each parent - introducing neonatal leave and pay for parents of premature
babies - requiring employers with 250 or more employees to publish
family related leave and pay, and flexible working, policies
on their website. In August 2018, the Equality and Human Rights Commission
(EHRC) published a report on disability and ethnicity pay gaps
and progression. The EHRC plans to produce guidance for
employers on collecting, using and reporting data on employee
ethnicity and disability. The EHRC also recommends that, by April 2020, employers (with
over 250 employees) should have a legal obligation to report on
ethnicity and disability in pay, recruitment, retention and
progression. The Government has also consulted on ethnicity pay gap
reporting and this is likely to be introduced in the future. The Government is consulting on proposals to increase the
employment of disabled people including: - enabling SSP to be paid during a phased return to work - requiring employers to give four weeks' notice that SSP is
due to end - giving non-disabled employees a right to request alterations
to the workplace to accommodate a health condition The consultation closes on 7 October A new Directive on whistleblowing has been adopted in Europe.
The key requirements include: - employers with 50 or more employees will have to establish
internal whistleblowing channels - employers should respond in full to reports within three
months - the whistleblower's identity cannot be disclosed without
their consent Whether the UK is obliged to implement this Directive depends
on the outcome of Brexit negotiations and any transition period. Separately, a review of whistleblower protection in the UK is
currently being carried out by the All Party Parliamentary Group
for Whistleblowing, which has already made a number of
recommendations for change and is working on further reports
and recommendations. A new Directive on work-life balance for parents and carers has
been adopted in Europe. The Directive includes provision for
five days per year of carers' leave. Whether the UK is required
to implement this Directive will depend on the outcome of
Brexit negotiations and any transition period.
Case Subject Matter
Lopez Ribalda v Spain Employee (ECJ) Monitoring
Royal Mail Group Ltd v Jhuti (Supreme Court)
Uber v Aslam (Supreme Court)
Issues Whether the employer breached employees' rights to privacy by
installing hidden cameras to monitor suspected thefts.
Whether an employee was dismissed for whistleblowing where the person who took the decision to dismiss was not aware that she had blown the whistle.
Whether minicab drivers were workers rather than self-employed individuals.
Various claimants v Morrisons (Supreme Court)
Royal Mencap Society v Tomlinson Blake (Supreme Court) Ali v Capita Customer Management; Hextall v Leicestershire Police (Supreme Court) Boxer v Excel/CitySprint (Employment Tribunal)
Brierly v Asda (Employment Tribunal)
National Minimum Wage
Shared parental pay and discrimination
Whether the employer was liable for a data leak by an employee involving personal information belonging to 5,000 other employees.
Whether employees who "sleep-in" (e.g. care workers) are entitled to the national minimum wage throughout the sleep-in time or only whilst working.
Whether a failure to enhance shared parental pay in line with enhanced maternity pay amounts to sex discrimination.
Whether workers as well as employees transfer under TUPE.
Whether female supermarket workers in shops received equal pay when compared with male workers at the supermarket warehouses.
We will report on these cases in Employment Update once the decisions are published
Date 1 November 2019
31 December 2020 30 June 2021
1 January 2021
1 January 2021
Topic European Temporary Leave to Remain (no deal scenario only)
Brexit Deadline for EU Settlement Scheme applications
New Global Talent Visa
UK's future skillsbased immigration system
Electronic Travel Authorisations and digital immigration system
The UK Government has set out its immigration plans for no deal Brexit.
EU nationals arriving after a no-deal Brexit will continue to be allowed to enter the UK visa-free, using their EU passports, for any purpose
including to work in the UK. They will be required to apply for status under a new European
Temporary Leave to Remain (Euro LTR) scheme if they want to stay beyond 31 December 2020. Employers will be able to continue to rely on EU/EEA passports to
evidence right to work and new requirements are likely to apply from
2021 when a "new points-based immigration system" is introduced. The new EU settlement scheme for EU nationals living in the UK is
now fully open. EU nationals (and their family members) with at least five years' UK
residence will be granted "settled status" and EU nationals (and their
family members) with less than five years residence will be granted
"pre-settled status". If the UK leaves the EU without a ratified Withdrawal Agreement (no-
deal) the deadline for applications will be 31 December 2020. EU nationals will need to be resident in the UK by the date of Brexit to be
covered by the scheme. If there is an agreed Brexit deal, the deadline for applications will be
30 June 2021 and EU nationals living in the UK by 31 December 2020 will be covered by the scheme. A new 3-year visa route for individuals with specialist skills in STEM
subjects under a re-branded Tier 1 Exceptional Talent route. The current Tier 1 Exceptional Talent route allows leaders with
exceptional talent or emerging leaders with exceptional promise to apply for visas based on an endorsement by one of the designated
competent bodies. The government plans to launch the newly re-branded Global Talent
visa route after Brexit, whether there is a deal or no deal, with an
expanded list of designated competent bodies to endorse applicants. The UK Government intends to bring forward legislation to end the
application of EU free movement rules in the UK and make EU nationals subject to UK immigration controls in the same way as non-
EU nationals. The draft legislation is currently in the form of the Immigration and Social Security Co-ordination (EU Withdrawal) Bill. The independent Migration Advisory Committee (MAC) has been
commissioned by the UK Government to consider salary thresholds as
well as conduct a review of the Australian immigration system and
similar systems to make recommendations for the new immigration system. The MAC has been asked to report in January 2020. The UK Government indicated that it then intends to introduce a new single immigration system covering both EEA and non-EEA nationals
from 1 January 2021. EU national applicants granted status under the new EU settlement
scheme are issued digital status, rather than a physical passport
endorsement or a residence permit. Applicants can access their UK immigration status online, and will be able to share limited access to
this portal with prospective employers or landlords as evidence of their right to remain in the UK. This is part of the streamlining and digitisation of the UK's visa system,
with a move towards a digital immigration system. UK visa applicants currently submit physical passports for
endorsement as part of their visa application process, and in future,
visas will be issued electronically, and sent to applicants by electronic format. New processes allowing applicants to scan and upload supporting documents with applications are being rolled out as part of the digitisation programme for UK visa applications. The government intends to introduce Electronic Travel Authorisations (similar to the US ESTA system) although no date has yet been announced for this to be implemented.
If you have any queries on this edition of In the Pipeline, please contact any member of the Employment Department
Sin Keall Partner
Tim Gilbert Partner
Ed Mills Partner
Adam Wyman Partner
Ailie Murray Senior Counsel
Alex Fisher Senior Counsel
Anna West Knowledge Counsel
Adam Rice Knowledge Counsel
Moji Oyediran Senior Associate
Charmaine Pollock Senior Associate
Zo Dearmer Senior Associate
Sarah Baker Associate
Elliot Roberts Associate
Clare Skinner Associate
Tessa Gilligan Associate
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