Corporate Governance Reporting Requirements
The Companies (Miscellaneous Reporting) Regulations 2018 came into force on 1 January 2019. The Regulations give effect to a wide range of corporate governance reporting improvements that BEIS has been working on since its Corporate Governance Green Paper of November 2016. Amongst other things, the Regulations introduced mandatory reporting of the ratios between CEO and average staff pay for listed companies.
Ethnicity Pay Gap Reporting
Momentum really seemed to be gathering behind the introduction of mandatory ethnicity pay gap reporting during the course of 2018 and 11 January 2019 saw the Government consultation on it closing. Undoubtedly a positive step, it will be more complex than gender pay gap reporting because of the number of different ethnicities involved. Whilst this may mean that there is a wait for implementation it seems a certainty for the legislative books within the next couple of years.
Depending on how things go over the coming weeks the Employment Rights (Amendment)(EU Exit) Regulations 2018 and the Employment Rights (Amendment)(EU Exit)(No.2) Regulations 2018 may come into force on Brexit "exit day", whenever that ends up being. Both pieces of legislation make technical changes to legislation to reflect the withdrawal of the UK from the EU but they will only be required in the event of a "No Deal". More generally, the UK Government has made it clear that workers' rights will be maintained post Brexit, and the Good Work Plan references the enhancement of rights.
The EU Settlement Scheme, under which EU citizens who meet the qualifying criteria can apply for settled status which will enable them to continue living and working in the UK, is due to be fully operational by the end of the March 2019. More information on this can be found here.
FROM APRIL 2019
As of 1 April, statutory maternity/paternity/adoption/shared parental pay and maternity allowance increases from £145.18 to £148.68 a week.
As from 7 April, statutory sick pay increases from £92.05 to £94.25 per week.
The annual Employment Tribunal award limit changes will take effect on 6 April 2019. The limit on the compensatory award for unfair dismissal will rise from £83,682 to £86,444.
The cap on the compensatory award is the lower of the maximum or 52 weeks' pay (based on the Claimant's gross salary prior to dismissal including employer pension contribution but excluding benefits in kind and discretionary bonus). As always there are a limited number of exceptions where the cap does not apply. These are dismissals for whistleblowing or for raising certain health and safety issues. In addition, there is no limit to the award that can be made where a dismissal is related to unlawful discrimination.
The limit on a week's pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) will increase from £508 to £525 meaning the maximum basic award increases to £15,750.
National Living/Minimum Wage
With effect from 1 April:-
NLW will increase from £7.83 per hour to £8.21 per hour (for those aged 25 and over)
21 to 24 year old rate will increase from £7.38 per hour to £7.70 per hour
18 to 20 year old rate will increase from £5.90 per hour to £6.15 per hour
16 to 17 year old rate will increase from £4.20 per hour to £4.35 per hour
Apprentice rate will increase from £3.70 per hour to £3.90 per hour
Two new statutory instruments will take effect from April 2019.
In consequence of the Employment Rights act 1996 (Itemised Pay Statement)(Amendment) Order 2018 all payslips must state the number of hours being paid where wages vary according to time worked.
In consequence of the Employment Rights Act 1996 (Itemised Pay Statement)(Amendment)(No 2) Order 2018 all workers (as well as employees) will have the right to a written pay statement and the ability to enforce that right before a Tribunal should the employer not comply.
Gender Pay Gap Reporting
4 April will see the second deadline for gender pay gap reports to be published by private and voluntary sector companies with 250 or more employees. Expect scrutiny of the improvement (or otherwise) from last year's figures.
Good Work Plan
6 April will see the first of the legislation that has been introduced in the UK Government's Good Work Plan taking effect - specifically the increase in penalties for aggravated breaches of employment law from £5,000 to £20,000 as set out in the Employment Rights (Miscellaneous Amendments) Regulations 2019.
LATER IN 2019 AND BEYOND
Details of further legislative change in 2019 are sparse, however we already know of significant new legislation coming into force in 2020.
Parental Bereavement (Leave and Pay) Act 2018
The Parental Bereavement (Pay and Leave) Act 2018 received Royal Assent on 13 September 2018. It entitles employees who find themselves in the tragic situation of having lost a child under the age of 18 to have 2 weeks' bereavement leave and, for those with the necessary qualifying service, paid leave. Regulations are required to bring the schedule to the Act (which creates the statutory entitlements) into force and the Government anticipates this happening in April 2020.
Taxation of Termination Payments
Although it was initially thought that the requirement for employers to pay NIC's on all payments above the £30,000 threshold (for non-contractual termination payments) would be implemented in 2018 this is now due to take effect in April 2020. There are no plans to change the unlimited employee NIC exemption on non-contractual termination payments and, other than for PILON's, the £30,000 exemption for income tax on non-contractual termination payments also remains.
Reform of IR35 in the Private Sector
The reported success of the change to off-payroll working in the public sector (introduced in April 2017) means this is to be extended to the private sector from 6 April 2020. The change means that the organisation, agency or other third party engaging an individual are responsible for operating the intermediaries legislation (IR35) - in other words assessing the employment status of the individual - rather than the individual being engaged doing it. Small organisations are exempt. More detail can be found here.
Good Work Plan
April 2020 will also see more legislation arising from the Good Work Plan coming into force. So far the statutory instruments laid before Parliament are:-
- The Employment Rights (Employment Particulars and Paid Annual Leave)(Amendment) Regulations 2018 provides for a written statement of particulars to be given from day one of employment (rather than within the current two month period) and that certain additional information must also be included in the statement. It also increases the period for determining an average week's pay for the purposes of calculating annual leave from 12 to 52 weeks;
- The Employment Rights (Miscellaneous Amendments) Regulations 2019 requires the aforementioned written statement to be given to all workers (rather than only employees) and lowers the requirements for employee requests to set up information and consultation arrangements; and
- The draft Agency Workers (Amendment) Regulations 2019 removes the "Swedish derogation" - a fairly controversial provision of the Agency Workers Regulations 2010 which means agency workers do not require to have pay parity with comparable direct recruits if they have employment contracts with employment businesses giving them the right to pay between assignments.
More legislation flowing from the Good Work Plan is likely to be laid before Parliament over the coming months.
WHATEVER HAPPENED TO…..?
Public Sector Exit Payment Regulations and Repayment of Public Sector Exit Payments Regulations
Both these pieces of legislation were expected to come into force in 2016. One provides for the capping of payments made to public sector employees on termination of employment and the other for repayment of those payments should certain public sector employees return to a role within the public sector within a short period of time after termination of an earlier role. Firm implementation dates for these provisions have not yet been announced.
Shared (Grand) Parental Leave
The Government announced plans to extend Shared Parental Leave (SPL) to include grandparents in late 2015. The Government’s original stated aim was to introduce this during 2018, although the consultation planned for early 2016 was delayed until after the Brexit referendum and, to date, has not taken place. Watch this space for further updates on this.
Ban on Corporate Directors
The ban on corporate directors expected to take effect in October 2016 was also delayed. No new implementation date has been announced.
KEY CASES FOR 2019
Where we have covered these cases in the past, more details on the facts and the judgements that have been appealed can be obtained by clicking on the case names below.
We are awaiting a number of interesting judgements from cases heard in 2018 including:-
Asda Stores Ltd v Brierley & Ors was heard by the Court of Appeal on 31 October and a decision is awaited. The appeal follows an EAT decision that a predominantly female group of supermarket retail employees can compare themselves with a mainly male group of distribution depot employees for the purposes of an equal pay claim of work of equal value.
UPDATE - The Court of Appeal judgement was handed down in February and upheld the decision of the employment tribunal and EAT. It is of note however that the issue being considered is a preliminary one, so all this judgement does is establish the Claimant's right to compare themselves to the distribution workers, it still remains to be established whether they do work of equal value with the comparators and, if so, the extent of any differential and whether Asda have a material factor defence.
Lopez Ribalda and others v Spain was heard by the Grand Chamber on 28 November 2018. The appeal is from a decision of the European Court of Human Rights that held the installation of covert cameras by an employer to monitor suspected theft by staff violated Article 8 rights to respect for private and family life. A decision is expected during 2019.
Crawford v Network Rail Infrastructure Ltd was heard by the Court of Appeal in November 2018. It concerns an appeal from an EAT decision that a worker's right to compensatory rest (because a 20 minute rest break under the Working Time Regulations 1998 had been missed) must be uninterrupted and cannot be made up of multiple shorter breaks.
UPDATE - The Court of Appeal handed down their judgement in February, finding that the EAT was wrong to decide that compensatory rest under WTR regulation 24(a) must be an uninterrupted period of 20 minutes. The Court held that the use of the word "equivalent" where it appears in regulation 24(a) cannot be intended to import an identical obligation to that under regulation 12 (which provides for 20 minutes uninterrupted break) and instead the intention must be that the rest afforded to the worker should have the same value in terms of contributing to his or her wellbeing.
There are also a number of high profile cases due to be heard in 2019, most notably:-
Tillman v Egon Zehnder Ltd was due to be heard by the Supreme Court on 22 and 23 January and concerns the validity of a non-compete clause that the Court of Appeal held to be impermissibly wide and therefore void. This was because it failed to exclude from its reach the employee having minor shareholdings in a competing business.
Agoreyo v London Borough Of Lambeth was due to be heard by the Court of Appeal on 29 January and concerns whether, as was held by the High Court, the suspension of a teacher accused of having used unreasonable force against children constituted a repudiatory breach of contract - in this case a breach of the implied term of trust and confidence.
UPDATE - the Court of Appeal handed down its judgement in February. Overturning the High Court it found that the correct legal test of whether the suspension was a breach of contract was whether the employer had responded to reports of misconduct by Ms Agoreyo in a reasonable and proper way. If, as in this case, the response was reasonable and proper it could not be said that the employer had breached the implied term of trust and confidence.
Chief Constable of Norfolk v Coffey is to be heard by the Court of Appeal on 19 or 20 February. A rare case of litigating a perceived discrimination claim, the facts relate to the refusal to employ a police officer because it was thought her hearing loss would require reasonable adjustments in the future.
Mattu v United Kingdom is awaiting a hearing date before the European Court of Human Rights. The case concerns the question of whether the Article 6 right to a fair hearing applies to internal disciplinary hearings. The Court of Appeal have previously held that the right was not engaged.
Royal Mail Group Ltd v Jhuti is awaiting a hearing date from the Supreme Court. This case considers whether an employee can be automatically unfairly dismissed for making protected disclosures when the person who took the decision to dismiss was unaware of the disclosures.
Capita Customer Management Limited v Ali where a Tribunal ruled that a male employee was discriminated against because of his sex when his employer refused to allow him any period of shared parental leave at full pay when a women on maternity leave would have had 14 weeks' enhanced maternity pay. The decision was overturned by the EAT and the case is due to be heard by the Court of Appeal on 1 May 2019.
Harpur Trust v Brazel concerns the calculation of paid holiday, complicated all the more on this occasion by term time working. An Employment Tribunal held it was correct to pro-rate (thereby capping) the 5.6 week holiday entitlement rather than using the statutory basis of calculation which would have allowed for a slightly increased entitlement. The EAT overturned the decision deciding the statutory calculation should be used even if that meant that part-time workers were treated more favourably than full timers as a result. A hearing date in the Court of Appeal is awaited.
Employment Law Fact Card 2019/20
Our employment law fact card is full of useful information for employers. You can access the PDF version of the 2019/20 version at the link below, or if you would like a free hard copy, please email email@example.com with your name and address.
Guide to Employment Law
For an overview of UK employment law see A Guide To Employment Law In Scotland, England & Wales. You can also find Innes on Google+, Twitter or connect with him on LinkedIn.