Employment law is constantly on the move. We keep track of the latest employment law changes so you don't have to. Below you'll find our regular round-up of legislation, case updates and helpful guides. For a list of key dates for 2017, see our employment law timeline.
Key changes in April
Legislation: A number of important employment law changes come into effect in April. We have set out a summary of the key changes in our employment law timeline.
Legislation: The Finance Bill has now been published and is making its way through Parliament. It includes the proposed new rules relating to:
- the taxation of termination payments due to come into effect in April 2018. Subject to the finalised Bill, from this date all notice pay will be taxable and employers will be liable to pay employer’s national insurance contributions on termination payments above £30,000
- off-payroll working in the public sector due to come into force on 6 April 2017 and will require public authorities who engage individuals through intermediaries (such as personal services companies) to become responsible for determining whether IR35 applies and whether tax and national insurance deductions should be made.
Legal update: Off-payroll working in the public sector
Achbita v G4S Secure Solutions
Case: The European Court of Justice (ECJ) has held that a company rule prohibiting the wearing of all visible signs of political, philosophical or religious belief was not directly discriminatory on the ground of religion or belief.
Although such a rule may give rise to indirect discrimination, the ECJ was of the view that it might be objectively justified by an employer's pursuit of a policy of political, philosophical and religious neutrality in its relations with customers. In view of this case, employers may want to consider the ethos of their own business and whether their dress code policy needs reviewing generally.
Legislation: The government has announced that its tax-free childcare scheme will begin on 28 April 2017, for eligible working parents of children under two. The scheme will be gradually rolled out over 2017, with the intention that by the end of the year it will be open to working parents, including the self-employed, with children under 12 (or under 17 for disabled children).
Eligible working parents will be able to apply to open an online account to pay for registered childcare, and for every £8 paid in, the government will add an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).
Updated: 9 March 2017
Lock v British Gas Trading Ltd
Case: The Supreme Court has refused to give British Gas leave to appeal in the long running case of Lock v British Gas Trading Ltd. This means that the Court of Appeal’s decision will stand and results-based commission and non-guaranteed overtime (i.e. overtime which workers are contractually obliged to perform) must be included in the calculation of holiday pay for the first four weeks of holiday under the Working Time Regulations.
Legislation: New PRA and FCA rules on regulatory references came into effect on 7 March 2017 for certain large financial services firms. These firms will need to ensure existing procedures and recording-keeping practices are in line with the more onerous requirements.
In relation to candidates being recruited to certain senior management roles, prospective employers must take reasonable steps to obtain references from all previous employers in the last six years.
There is also a continuing obligation on the employer to update any references given in the last six years, if the employer becomes aware of relevant information that means the reference is no longer accurate.
Increase in statutory rates
New statutory rates come into force in April. SMP, SAP, SPP and ShPP will increase to £140.98 on 2 April 2017. SSP will increase to £89.35 on 6 April 2017.
Immigration skills charge
Legislation: From 6 April 2017 an Immigration Skills Charge of £1,000 per year will be payable for each migrant worker sponsored under the Tier 2 General and Tier 2 Intra Company Transfer routes. This must be paid upfront when the certificate of sponsorship is assigned to the individual and is in addition to the normal fee. A reduced charge of £364 per year per certificate of sponsorship will apply for small or charitable organisations.
Updated: 23 February 2017
Gender pay reporting – final regulations approved
Legislation: The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 have now been approved by Parliament and will come into force on 6 April 2017.
Legal update: Gender pay gap reporting: requirements for employers
Off-payroll working in the public sector
Legislation: New rules will come into force on 6 April 2017 that will require public authorities who engage individuals through intermediaries (such as personal services companies) to become responsible for determining whether IR35 applies and whether tax and national insurance deductions should be made.
Increase in compensation limits
Legislation: The annual increases to various statutory compensation limits have just been announced. These increases are of particular relevance to those making redundancies on or after 6 April 2017 as the maximum amount for a week’s pay (used to calculate statutory redundancy payments) will increase to £489 per week (from £479 per week).
In addition, the maximum compensatory award for unfair dismissal will rise to £80,541 (from £78,962) where the effective date of termination is on or after 6 April 2017.
“Self-employed” plumber is a worker
Pimlico Plumbers Ltd v Smith
Case: The Court of Appeal has held that a plumber, who was self-employed for tax purposes, was in fact a worker for the purposes of employment rights.
This decision is particularly significant because it is a Court of Appeal ruling that will be binding on other courts and tribunals and will be a key authority in future cases. While the case turns on its own facts, there appears to be a growing trend to find that the individual is a worker where a business retains a significant degree of control over an individual.