CIPD Employment Law Update slideshow May 16

EMPLOYMENT LAW UPDATE17 May, 2016

Presented by

Yeing-Lang Chong, Partner

Agenda

• NEW LEGISLATION – In brief

• NEW LEGISLATION – In the pipeline

• CASE LAW UPDATE

• EU REFERENDUM: The Brexit Effect

• Q&As

NEW LEGISLATION – In brief

National Living Wage

The National Minimum Wage (Amendment) Regulations 2016

• In force from 1 April 2016

• New mandatory ‘National Living Wage’ for workers 25 or older

• Tougher penalties on employers for non-payment: maximum £20,000 per worker

National Living Wage

The new minimum wages from 1 April 2016 are:

• Age 25+ - £7.20ph (the National Living Wage)

• 21-24 - £6.70ph [£6.95 from 1 Oct 2016]

• 18-20 - £5.30ph [£5.55 from 1 Oct 2016]

• 16-17 - £3.87ph [£4.00 from 1 Oct 2016]

• Apprentices <19 (or in 1st year & 19+)

- £3.30ph [£3.40 from 1 Oct 2016]

Gender Pay Reporting

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2016

• In force: 1 October 2016

• Compulsory for private sector & voluntary organisations employing 250+ staff (public sector – date TBC)

• Requirement to publish prescribed info about difference in pay between men and women


• Employees who work in GB; contracts governed by UK law

• Calculate gender pay gap by looking at:

▫ mean and median figures

▫ pay amongst men and women

• Pay = basic pay, holiday pay, maternity pay, sick pay, shift premiums, bonuses, car or clothing allowances


• Now: collect data incl. figures on bonus payments paid from 1 May 2016

• 1 May 2017: carry out calculations to determine gender pay gap results

• By 30 April 2018: publish results of gender pay gap analysis on website (as at 30 April 2017) (for min. 3 years) & on Government reporting website

• Annual reporting required by 30 April each year.

NEW LEGISLATION – Coming up

Termination & Exit Payments

• Announced in March 2016 budget

• From 2018, termination payments >£30,000 subject to employers’ national insurance contributions

• (<£30,000 is free of tax and will remain free of NI contributions)


• From 1 April 2016

• Public sector employees with £100,000+ annual earnings

• Requirement to repay termination payments

• If returning to same part of sector within 12 months


• Cap on public sector exit payments at £95,000

•Applicable to lump sums (including redundancy payments)

•No confirmed implementation date

Trade union law and strike ballots

Trade Union Act 2016

• Royal Assent received 4 May 2016

• Commencement date TBC


Key provisions:

• requirement for at least 50% turnout in votes for industrial action

• in certain ‘important’ public services - health, education (<17 years), transport, border security and fire sectors - additional threshold of 40% support from all eligible members, to take industrial action, must be met for action to be legal


Key provisions (continued):

• clearer description of the trade dispute and the planned industrial action on the ballot paper required, so that all union members are clear on what they are voting for

• 6 month time limit (or 9 months if the union and employer agree) for industrial action so that mandates are always recent



• transparent process for trade union subscriptions that allows new members to make an active choice of paying into political funds

• payroll deductions for trade union subscriptions are only administered where the cost is not funded by the public

Grandparents’ rights to Shared Parental Leave and Pay

Proposal to extend shared parental leave and pay to working grandparents. Aim:

- Increase flexibility and choice for working parents

- Help support the costs of childcare during the 1st year of child’s life

Implementation 2018?

Immigration Bill

Immigration Bill 2015-16

Enforcement not expected until October 2016 at the earliest


Key provisions:

• Existing criminal offence of an employer employing an illegal migrant extended from ‘knowingly’ to having ‘reasonable cause to believe’ an employee is illegal worker

• Sentence for knowingly employing an illegal worker raised from 2 to 5 years’ imprisonment

• New offence of illegal working: illegal workers assets can be seized



• Introduction of an ‘immigration skills charge’ on employers sponsoring workers from outside Europe

• New requirement for public sector workers in customer-facing roles to speak fluent English

CASE LAW UPDATE

Holiday Pay

Holiday Pay

1. Boris had 3 days’ outstanding holiday to take at the end of 2015. How much pay in lieu of holiday can you make to Boris?

2. Boris decides to take 5 days holiday. In calculating his holiday pay, do you take into consideration his:

a) Overtime pay?

b) commission payments?

3. Boris makes a claim for his incorrectly calculated holiday pay – how is his claim for holiday pay calculated?

4. Would your answer above be any different if Boris had made his claim on 1st April 2015?

Holiday pay

Case Study:

1. Boris had 3 days’ outstanding holiday to take at the end of 2015. How much pay in lieu of holiday can you make to Boris?

2. Boris decides to take 5 days holiday. In calculating his holiday pay, do you take into consideration his:a) Overtime pay?

b) commission payments?

Holiday pay

• Minimum UK statutory requirement of a full time employee: 28 days / 5.6 weeks incl. public holidays

• Bear Scotland v Fulton (2014): ▫ non-guaranteed overtime should be included in

holiday pay

• British Gas Trading v Lock & another (2015):▫ Commission must be included in holiday pay

Holiday pay

1. Boris makes a claim for his incorrectly calculated holiday pay – how is his claim for holiday pay calculated?

2. Would your answer above be any different if Boris had made his claim on 1st April 2015?

Holiday pay

• British Gas Trading v Lock & another▫ Holiday pay is based on actual average earnings

• Deduction from Wages (Limitation) Regulations 2014

• In force: 8 January 2015

• Claims for back pay of incorrectly calculated holiday pay limited to 2 years (Bear Scotland)

• Applicable to claims presented >1 July 2015

EU REFERENDUM:

The Brexit Effect

• EU referendum: 23rd June 2016

• Rights on which EU law has had significant effect:▫ Discrimination

▫ Maternity and parental rights

▫ Protection of part-time, fixed-term and agency workers

▫ Working time, incl. daily / weekly rest & time, holiday pay

▫ TUPE

▫ Collective consultation

Principles

Remain or Leave?

1. Some areas – pay, dismissal, strike action -largely within domain of UK law

2. UK required to give effect to EU derived employment rights and ensure effective remedy for infringement

3. EU derived employment rights operate as a floor, not a ceiling to give protection to workers

4. Future Government to have complete legal reign on social rights?

REVISION

1. LEGISLATION:a) National Living Wage

b) Gender Pay Reporting

c) Termination & exit payments

d) Trade Union Act 2016

e) Grandparents rights to SPL & pay

f) Immigration Bill 2015-16

2. CASE LAW UPDATE: Holiday Pay

3. EU REFERENDUM: The Brexit Effect

Any questions?

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