Statutory rates of pay and compensation limits to increase from April

From 5 April 2015, statutory rates for maternity pay (SMP), paternity pay (SPP), adoption pay (SAP) and new shared parental leave pay (ShPP) will increase to £139.56 per week (from £138.18 per week).The statutory sick pay (SSP) rate will increase to £88.45 per week.

Tribunal compensation limits are also rising. From 6 April, the maximum compensatory award for unfair dismissal will be £78,335 (up from £76,574) or 52 weeks' pay – whichever is the less. A week's pay (used for tribunal awards and calculation of statutory redundancy pay) will be capped at £475, an increase of £11 from the current £464 limit.

Political promises as the Election looms

Labour have announced that, if they win the General Election in May 2015, they will double statutory paternity leave from two weeks to a month.  In addition, statutory paternity pay would rise from just under £140 per week to £260 per week (which equates to 40 hours at the National Minimum Wage). According to the party, only 55% of fathers take the full two weeks of ordinary paternity leave to which they are entitled and it is hoped that this change would increase that to 70%.  

Labour will also consider granting workers a statutory right to request that a business moves into employee ownership when there is a "business succession". According to Ed Miliband MP, employee buyouts "can be an attractive route for business succession because they transfer ownership to people with a genuine interest in an enterprise's long-term success".

Meanwhile, the Liberal Democrats have announced that under their vision of the shared parental leave system which will apply to babies due on or after 5 April, if elected they would give fathers a month's leave after the birth of a child on a "use it or lose it" basis (meaning that it could not be transferred to the mother). The concept of a "father's quota" has been used in Scandinavian countries to drive an increase in the number of fathers taking time off after their child is born.

Changes to UK's Visitor Visas announced

On 10 February 2015, Home Secretary Theresa May announced that she plans to overhaul the United Kingdom's Visitor Visa system to make it easier for business visitors and tourists to enter the UK. These changes have been announced in the light of complaints from business leaders that the current system is not user friendly and acts as a hindrance in their efforts to expand the UK economy.

Theresa May intends that the changes to the visitor system will:

  • streamline the existing 15 visitor visa categories into 4 categories covering (1) tourists, (2) those waiting to undertake paid engagements such as appearing in concerts, theatre or other performance arts, (3) those visiting Britain for a marriage or civil partnership and (4) a transit visa for those passing through the UK;
  • simplify the visa application process;
  • allow visitors to use the same visa to spend time in the UK as a tourist and also to conduct business whilst here; and
  • expand the permitted activities under the visitor visa category.

Details of the overhaul have not yet been released and, therefore, it remains to be seen whether they will in fact address business concerns. The specific changes, when announced, will be considered in a future edition of Law at Work.

To find out more about UK immigration laws, please contact Vikki Wiberg or Charlie Pring.

National Minimum Wage laws to be consolidated

HM Stationery Office has now published the draft National Minimum Wage Regulations. The Regulations are not intended to have any substantive changes, but will repeal and re-enact the original National Minimum Wage Regulations 1999 together with their amendments since then.

In its response to consultation on the draft Regulations, published on 22 January, the Department for Business, Innovation and Skills noted that there had been general support for the consolidation and that most respondents agreed that the new rules were clearer. The Government intends to address requests for clarity on some issues (including the rules on sleeping time, travel time and the definition of ‘rest breaks’) by issuing guidance.

To read more on BIS' response to the consultation, click here

Reckless bankers may face fixed pay clawback

The chief executive of the Financial Conduct Authority (FCA), Martin Wheatley, told the House of Commons Treasury Committee this month that he is "sympathetic" to the concept of the UK regulators being able to claw back bankers' fixed pay as well as bonuses. The European Union has introduced a bonus cap since the beginning of this year which limits bonuses to a maximum of 200% of fixed pay. Figures suggest that as a consequence, fixed salaries appear to be rising in the City.

However, he stressed that such a move was only being considered due to the unintended effects of the European Union bonus cap included in CRD IV, which came into effect at the beginning of this year, saying "My instinct is that we've lost the tool that we had, which was the ability to claw back a significant component of compensation. Therefore being able to claw back against fixed pay would substitute for that, to a degree."