Hello and welcome to Integra’s spring newsletter
Spring is always a busy time for employment lawyers and 2016 is no exception!
A number of significant changes to the law have already taken place, with others coming into effect during April. In this newsletter we’ve set out some of the key issues employers need to be aware of this Spring.
Statutory payments and compensation limits
The Government has confirmed that payments for Statutory Maternity, Paternity, Adoption and Shared Parental Pay, and the Statutory Maternity Allowance, will remain at their 2015/16 levels for the 2016/17 tax year (current amounts are £138.58 a week, or 90% of the parent’s average weekly earnings if lower). Statutory sick pay has also been frozen at £88.48 per week for 2016/17.
The annual increases in compensation payments have also been confirmed. These apply to dismissals or detriments occurring on or after 6 April 2016. The main changes are:
- The cap on a week’s pay increases to £479 (from £475). This is used for various purposes including calculating statutory redundancy pay and the basic award for unfair dismissal.
- The maximum compensatory award for unfair dismissal increases to £78,962 (from £78,335).
New protection for zero hours contract workers
New legislation has been introduced to protect workers on zero hours contracts from dismissal or being subjected to detrimental treatment. The rules apply where the principal reason for the dismissal or detriment is breach by the employee of an exclusivity clause in their contract preventing them from working for another employer. You may recall that separate legislation was introduced last year making these kinds of clauses unenforceable.
In the case of dismissals any such dismissal will be automatically unfair and the employee does not need the usual 2 year qualifying period of service to bring such a claim.
The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 (SI 2015/2021) came into force on 11 January 2016.
Employers using zero hours contracts should review them and ensure that any exclusivity clauses are taken out.
Modern Slavery Act 2015
This Act requires commercial organisations with a minimum total turnover of £36 million a year to prepare and publish a slavery and human trafficking statement for each financial year ending on or after 31 March 2016.
This must include a statement that either:
- The organisation has taken steps during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains or in any part of its business; or
- That the organisation has taken no such steps.
Whilst on the face of it, this legislation only applies to larger enterprises, it’s likely that smaller businesses will also need to comply. The requirement is that affected organisations must seek to establish that human trafficking and slavery is not taking place in any of its supply chain. If smaller enterprises want to be suppliers to big business, it is likely they will be expected to show what steps they take to comply with the Modern Slavery Act as part of the procurement process. Potential suppliers without a policy statement will be put at a substantial disadvantage and could lose business as a result.
Gender pay gap reporting on its way
Labour MPs and trade unions have reacted angrily to the news that the first gender pay gap reports now won’t appear until 2018. The rules are expected to come into force in October this year. Private sector businesses with more than 250 employees will be required to carry out the required calculations regarding gender pay gap as at 30 April 2017 and publish this information no later than April 2018. This process will then have to be repeated on an annual basis afterwards.
Employers affected by the new rules will be required to publish information relating to:
- Differences in mean pay between men and women
- Differences in median pay between men and women
- Differences in bonuses between men and women
- The proportions of men and women who receive bonuses
- The gender pay split broken down into quartile pay bands
Details will then be collated and published in Government league tables ranking companies by the size of their gender pay gap and differences in bonuses paid to male and female staff.
Whilst it is some time until figures have to be published, affected employers are well advised to start looking at the calculations now to identify the level of any gender pay gap in their organisation and devise a strategy for addressing this in the future.
Enforcement of Employment Tribunal awards and settlements
As of April 2016, the Government will be able to take action against employers who fail to pay compensation ordered by an Employment Tribunal or sums payable as part of Acas conciliated settlements. This includes costs awards, preparation time orders, Employment Tribunal fees and Acas conciliated settlements.
If an employer fails to pay the relevant sums by the due date, they will be served with a Warning Notice. If they still don’t pay, a Penalty Notice will be issued requiring the employer to pay 50% of the outstanding amount to the Secretary of State.
The penalty is subject to a minimum amount of £100 and a maximum of £5,000. Like a parking ticket, the amount payable will be reduced by 50% if the employer pays the original sum in full, plus the reduced penalty amount, within 14 days of receiving the Penalty Notice.
The new rules mirror similar provisions introduced in 2014 introducing penalties where an employer loses a case in the Employment Tribunal and there are ‘aggravating features’.
National Living Wage from 1 April 2016
There has been much talk about the National Living Wage. In effect this is just a substantial increase in the National Minimum Wage, which on 1 April increases to £7.20 an hour for over 25s. (from the current £6.70).
The other changed Minimum Wage rates will be:
Ages 21-25: £6.70
Under 18s: £3.87
One to watch – shared parental leave and pay working grandparents
Proposed legislation could extend shared parental leave and pay to working grandparents. The move was announced by Chancellor, George Osborne, at the Conservative conference in Manchester last October.
Mr Osborne’s proposals involve extending the current system of shared parental leave, which allows a mother and father to share up to 50 weeks of parental leave, to working grandparents – reflecting their vital role in providing childcare. Research suggests that more than 50% of mothers rely on grandparents to help look after their children when they first return to work after having or adopting a child.
As well as sharing leave, parents and grandparents will also be able to split statutory shared parental pay, so grandparents won’t miss out financially by providing childcare. The proposed scheme aims to help parents return to work more quickly if they want to, and enable grandparents to stay in work if they want to provide childcare.
Mr Osborne commented: ‘Around two million grandparents have either given up a job, reduced their hours or taken time off work to look after their grandchildren. Allowing them instead to share leave with their children will keep thousands more in the workplace, which is good for our economy.’
The new legislation, due to be introduced in 2018, could prove particularly beneficial to single parents, who could share their parental leave without having a partner.
To discuss these issues or any other employment law problem get in touch with Integra at email@example.com or 0115 987 6790 or 0203 478 1260.