UK vote to exit the E.U. (“Brexit”)

On 23 June 2016, the U.K. voted to leave the European Union. The UK Government has now triggered Article 50 of the Treaty on European Union (the article to signify the withdrawal process). Therefore, the two year countdown to Britain’s exit has begun.

Prime Minister Theresa May has, however, confirmed that Brexit should be a ‘hard’ or complete Brexit, potentially meaning a full exit from the single market and the obligation to accept freedom of movement. So as to avoid a wholesale revocation of European law, the Prime Minister has confirmed the government’s intention to introduce the Great Repeal Bill. This would have the impact of repealing the European Communities Act 1972 (which provides legal authority for E.U. law to have effect as national law) and would transfer any E.U. laws in place immediately beforehand directly into U.K. law.

The intention is that this will allow for a ‘calm and orderly’ exit from the E.U. giving Parliament time to review, amend or scrap European derived laws over time and in the usual way, thus reducing uncertainty for businesses operating in the U.K.

Requirement to publish gender pay gap

Gender Pay Gap Regulations will come into force on 6 April 2017, and will require employers with 250 or more employees to collate and publish data on their gender pay gap. Employers will then have until 30 April 2018 to publish their first gender pay report.

Increases costs to employers

  • Draft regulations are due to come into force from 6 April 2017 requiring employers with a payroll bill (or expected payroll bill) in excess of £3 million to pay an apprenticeship levy of 0.5% of the employer’s total pay bill. All employers will have an annual allowance of £15,000 which will be set off against the levy. The draft regulations contain certain reporting obligations and rules in relation to connected employers, and the government has confirmed that funding for training will be accessible to all employers in England via the Digital Apprenticeships Service. Government top-ups will be available for those employers who have had to pay the levy.
  • In April 2016, the National Living Wage came into force at a rate of £7.20 per hour for those aged 25. This is set to increase to £7.50 per hour from April 2017, and the overall intention is for the National Living Wage to increase to £9 per hour by 2020.
  • More SME employers will reach their staging dates for auto enrolment purposes. This will require employers to enrol eligible jobholders into a qualifying pension scheme and make contributions on their behalf.


A series of new measures impacting the financial services sector

In January 2016, the new claw back powers came into effect. In March 2016, we saw the introduction of the new Senior Managers Regime with a new criminal offence of ‘reckless misconduct’, increased responsibilities, and personal liabilities for senior managers. This came at the same time as the new whistleblowing rules of the Financial Conduct Authority and the Prudential Regulation Authority which apply to larger financial services and insurance companies with asset of £250 million or more.

Regulation of zero hours contracts

In January 2016, we saw the introduction of regulations which give employees the right to claim unfair dismissal, and workers and employees the right to bring a detriment claim if they are dismissed or subject to a detriment for breaching an exclusivity clause.

New rules making it harder to strike

The Trade Union Bill 2015-16 contains changes to balloting rules to make it harder to strike by, amongst other things, increasing the percentage thresholds that the union must achieve to take industrial action.