Gig economy and Taylor Review
The Government's response to the Taylor Review and joint Work and Pensions and BEIS Select Committees report (the latter of which included proposed draft legislation) was published as expected in early 2018. While accepting many of the proposals the response provided very few answers as to how they would be implemented, instead opening four consultations seeking views of businesses and individuals on implementation. For more detail see our report.
FROM APRIL 2018
The annual Employment Tribunal award limit changes took effect on 6 April 2018. The limit on the compensatory award for unfair dismissal rose from £80,541 to £83,682.
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 dismissals - including for whistleblowing, certain health and safety reasons and discrimination - where the cap does not apply.
The limit on a week's pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) increased from £489 to £508 meaning the maximum basic award increased to £15,240.
As of 1 April statutory maternity/paternity/adoption/shared parental pay and maternity allowance increased from £140.98 to £145.18 a week.
As from 6 April statutory sick pay increased from £89.35 to £92.05 per week.
Taxation of Termination Payments
The first stage of the UK Government's proposed simplification of the taxation of termination payments was implemented on 6 April 2018 meaning all payments in lieu of notice (PILON) are taxable irrespective of whether they are contractual or not. According to the February HMRC Employer Bulletin, this change applies to payments received on or after 6 April 2018 in circumstance where the employment also terminates on or after 6 April 2018. 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 also be implemented this year that is now to take effect in April 2019. There are no plans to change the unlimited employee NIC exemption on such non-contractual termination payments and, other than for PILON's, the £30,000 exemption for income tax on non-contractual termination payments also remains.
National Living/Minimum Wage
With effect from 1 April the NLW increased from £7.50 to £7.83 per hour while the NMW increased as follows -
21 to 24 year old rate from £7.05 to £7.38 per hour
18 to 20 year old rate from £5.60 to £5.90 per hour
16 to 17 year old rate from £4.05 to £4.20 per hour
Apprentice rate from £3.50 to £3.70 per hour
Gender Pay Gap Reporting
4 April saw the first deadline for gender pay gap reports to be published. As expected the majority of companies (77%) reported men's median pay as higher than women's. So a marker has been drawn in the sand and 4 April 2019 figures will throw some light on whether companies are managing to reduce the gap.
Pension Auto Enrolment
The minimum contribution to pensions under automatic enrolment has increased from the current 2% of earnings to 5% (2% from the employer, 2.4% from the worker and 0.6% as tax relief from the government). This amount will rise again in April 2019 to 8% of earnings (3% from the employer, 4% from the worker and 1% as tax relief).
General Data Protection Regulation/Data Protection Act
The GDPR and the new Data Protection Act took effect on 25 May 2018. The GDPR is intended to provide individuals with more control over their personal data and is implemented by the new Data Protection Act. An overview of the provisions is available here with FAQ's here.
OCTOBER 2018 AND BEYOND
Parental Bereavement Bill
The Parental Bereavement (Pay and Leave) Bill entitles parents who have lost a child under the age of 18 to have 2 weeks bereavement leave, and for those with the necessary qualifying service, paid leave. Although it was introduced into Parliament in 2017 reports suggest it will not become law until 2020.
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 and 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.
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 2018
We are awaiting a number of interesting judgements from cases heard in 2017 and early 2018, including:-
Donelien v Liberta UK Ltd - the case which seems to have been trundling on for years was heard by the Court of Appeal in November 2017. The Court is considering an appeal against an EAT decision that an employer that took reasonable steps, but not every possible step, to ascertain whether an employee was disabled, did enough to avoid having constructive knowledge of the disability. UPDATE - the Court of Appeal's judgement was handed down on 8 February 2018 dismissing Ms Donelien's appeal and upholding the EAT decision. Read our full report here.
Capita Customer Management Limited v Ali is the case 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 case was heard by the EAT on 20 & 21 December 2017.
UPDATE - the EAT judgement was handed down on 11 April 2018 with the EAT overturning the Tribunal. The EAT found the appropriate comparator for a male on shared parental leave was a female on shared parental leave who would have been treated the same way and accordingly there was no direct discrimination. Read our full report on this and the Hextall case (see below) here.
Hextall v Chief Constable of Leicestershire Police is similar to Capita v Ali above but in this case the Tribunal held that a police force's policy of giving a period of full pay to mothers on maternity leave but paying only statutory shared parental pay to partners is not indirectly discriminatory. The case was heard in the EAT on 16 January 2018.
UPDATE - the EAT judgement was handed down on 1 May 2018 with the EAT finding that the tribunal had erred in a number of ways in reaching their conclusion that there had been no indirect discrimination and remitted the case back to a different tribunal. This leaves the door open for a finding that differentiating pay could amount to indirect discrimination. See above for link to our full report including the importance of being able to establish a defence of justification.
Pimlico Plumbers Ltd v Smith - another high profile case dealing with employment status was heard in the Supreme Court on 20 and 21 February.
UPDATE - the Supreme Court judgement was handed down on 13 June 2018 with the court upholding the decisions of the ET, EAT and Court of Appeal - Mr Smith was indeed a worker and not self employed. Read our full report on this case here.
Focus Care Agency Ltd v Roberts was heard in the Court of Appeal on 20 March 2018. Judgement will address the correct approach to determining the question of whether employees who "sleep-in" in order to carry out duties, if required, engage in "time work" for the full duration of the night shift or whether they are only entitled to NMW when they are awake and carrying out relevant work.
Lee v McArthur and Ashers Baking Company Ltd, otherwise known as the "gay cake case" will be heard by the Supreme Court on 1 May 2018. The Court of Appeal in Northern Ireland held that a bakery directly discriminated against a gay man on the grounds of sexual orientation by refusing to bake a cake with the caption "Support Gay Marriage" on it.
There are also a number of high profile cases still to be heard in 2018, most notably:-
International Petroleum Ltd & Ors v Osipov and Ors will be heard by the Court of Appeal in July. The appeal is against a decision of the EAT which decided that two non-executive directors were personally liable for their part in the dismissal of a whistleblower.
Asda Stores Ltd v Brierley & Ors will be heard by the Court of Appeal on 31 October. 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.
Uber BV and ors v Aslam and Ors - after Uber's application to leapfrog their appeal from the EAT directly to the Supreme Court was rejected in November, this well known case regarding employment status is also to be heard in the Court of Appeal on 31 October.
The Sash Window Workshop Ltd and another v King - after the ECJ judgement opening the door to significant holiday pay claims, in November 2018 the Court of Appeal will now consider whether a worker is entitled to be paid on termination for any periods of annual leave that have accrued during employment, where the worker has been prevented from taking that leave because the employer would not grant paid leave. Prepare for the floodgates to open.
Employment Law Fact Card 2018/19
Our employment law fact card is full of useful information for employers. You can access the PDF version of the 2018/19 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.