April increases to statutory rates and awards

As previously covered in Law at Work, the new National Living Wage will come into force from 1 April 2016. All workers aged 25 or over will be entitled to a minimum of £7.20 per hour. The National Living Wage is in effect a new pay band under the National Minimum Wage Regulations, and those rates remain in force for other workers: £6.70 (increasing to £6.95 from 1 October 2016) for those aged 21 and above, £5.30 (£5.55 from October) for 18-20 year olds, and £3.87 (£4.00 from October) for 16 and 17 year olds, with a special rate of £3.30 (£3.40 from October) per hour for apprentices under 19 years of age, and those aged 19 and over who are in the first year of their apprenticeship.

The limit on a week’s gross pay (used for calculating statutory redundancy payments and basic awards for unfair dismissal, amongst others) will rise from 6 April from £475 to £479, and the maximum compensatory award for unfair dismissals where the effective date of termination is on or after 6 April will increase to £78,962 from the current £78,335 (or 52 weeks’ pay, whichever is the lesser).

There will be no change to the lower rate of statutory maternity, paternity, adoption and shared parental pay which will remain at £139.58 per week.

Review of Parental leave by European Parliament

The Committee on Women’s Rights and Gender Equality, part of the European Parliament, has published an opinion calling for action to address the perceived failure of the revised Parental Leave Directive to achieve its objectives in terms of work-life balance, female labour market participation and men’s share of childcare. It notes that only 2.7% of those taking parental leave in 2010 were men, and that there is generally a low take up of unpaid or low paid family related leave. It is calling for a review of the Parental Leave Directive with the aim of the leave being both non transferable and paid. In Great Britain the whole 18 week entitlement is currently non transferable. The Committee’s opinion is addressed to the Committee on Employment and Social Affairs, which will decide whether to put the proposals forward for debate by the European Parliament.

Does your holiday year begin on 1 April?

The Working Time Regulations entitle all workers to a minimum of 5.6 weeks’ paid annual leave each year – 28 days for someone who works full time. Some employers deal with this by offering four weeks’ paid holiday, plus bank holidays – typically eight in a year in England and Wales (the dates and number of bank holidays vary in Scotland and Northern Ireland).

There are two bank holidays at Easter (Good Friday and Easter Monday) and, since Easter is on 27 March this year but 16 April 2017, this means that if your holiday year starts on 1 April, your 2015/16 holiday year had ten bank holidays, but your 2016/17 holiday year will have only six. An employer who offers 20 days holiday plus bank holidays to full time workers (or equivalent to part time workers) may therefore be in breach of the Working Time Regulations for the next holiday year.

President of Tribunals Annual Report, and the continuing saga of employment tribunal fees

The Senior President of the Tribunals has published his Annual Report for the year 2014/15.

2014/15 was the first full year in which employment tribunals and the Employment Appeal Tribunal charged fees to claimants and appellants. In England and Wales, tribunal claims are down by 40%, and by 63% in Scotland since 2012 (where sex discrimination claims have dropped by the largest margin, by 85%). Although appeals to the EAT in England and Wales are down by half, and in Scotland by two-thirds, the success rate of those appeals is unaltered.

These statistics come at a time when fees are once again under review. The union UNISON has been granted leave to appeal to the Supreme Court its judicial review case arguing that fees are indirectly discriminatory. In Scotland, devolved powers include the tribunals, and it is possible that fees will be dropped entirely.

The reasoning behind fees was of course to reduce the burden on the employment tribunal system, the same principle behind the introduction of Acas pre-claim conciliation. Statistics from the first full year of pre-claim conciliation reveal that 15% of prospective claims settle during that process; however, a further 63% do not go on to become formal claims filed with the tribunal.

Self-employment review published

government-commissioned independent review looking at the challenges and opportunities for those who want to work for themselves has been published.

The report notes that 4.6m people in the UK (15% of the workforce) are self-employed (a record), and the number is expected to grow. Much of the economic growth of the last few years has been driven by this sector. The impact of technology has been tremendous.

Amongst other recommendations, the review suggests that:

  • Young people should be educated to prepare them for self-employment or employment – eg finance, book keeping, cash flow, taxation knowledge are skills which would benefit everyone and should be on the curriculum.
  • Advice and support available should be accessible through a central portal.
  • Overly complicated legislation and administration needs addressing in a clear and common-sensical manner.
  • Impact assessments (currently carried out to assess effect of new policies on different sectors) should include effect on self-employed.
  • Government should look at taxation to see if can be simpler and better advice given.