Employment law updates – March 2017

Please see below for our latest Employment law news updates:

  • The majority of the provisions of the Trade Union Act 2016 came into force on 1 March 2017. The key changes include:

    • 50% turnout requirement for ballots in order for industrial action to be lawful;
    • additional threshold of 40% support from all eligible members for industrial action in ‘important public services’ as defined by the Trade Union Act 2016;
    • obligation to provide a minimum of 14 days’ notice of industrial action, unless the employer agrees to 7 days; and
    • industrial action must be taken within 6 months of the ballot result.
  • Although it may appear to be obvious, the Employment Appeal Tribunal has held in the case of Peninsula v Baker that an employee will not be able to claim harassment for their disability unless their condition satisfies the definition of disability in the Equality Act 2010.

    It was fatal to the employee in this case that the EAT found that the he had failed to prove he was a disabled person in accordance with the definition of disability under the Equality Act 2010 in respect of his assertions of dyslexia. It was held that the employee could not bring a claim for harassment on the grounds of disability discrimination.

    Whilst this makes it more difficult for employees to bring a claim for harassment on the basis of a perceived disability, employers should remain diligent and follow best practice when an employee asserts they have a potential disability, such as obtaining a medical report and make appropriate reasonable adjustments.

  • The Employment Rights (Increase of Limits) Order 2017 has been brought into effect implementing the annual increases in compensation payments. The increase will apply to any dismissals or detriments that occur on or after 6 April 2017.

    The increases include:

    • an increase in the week’s pay figure to £489 (from the current level of £479)
    • an increase to the maximum compensatory award to £80,541 (for “ordinary” unfair dismissal from the current £78,962).
  • In light of much publicised uncertainty surrounding employment status and whether an individual is an employee or self-employed, HMRC have introduced an online tool to assist people and employers to determine, for tax purposes, an individual’s employment status.

    So, how will the tool work?

    The tool is intended to allow HMRC to determine whether the IR35 rules apply to the engagement of the worker and whether that worker should pay tax through Pay as You Earn (PAYE) for that engagement.

    The information that is needed to use the service tool will include:

    • who controls when, where and how the work is done
    • how the worker is paid i.e. do they invoice for their work
    • whether the engagement includes any benefits
    • the worker’s responsibilities.

    The tool can be found here

    Whilst the tool is a useful one, Sarah Austin has commented on some of the tool’s teething problems here.

    • The Apprenticeship Levy, a new form of employment tax, will take effect in April 2017. The levy sees employers paying 0.5% of their annual wage bill into a digital account to be used for training and assessing apprentices. The Government will offset the levy by making an allowance of £15,000 per employer which means the levy will only actually affect employers with a wage bill of more than £3million. For more information come to our breakfast briefing on 25 April (register here).
    • A reminder that the Gender Pay Gap Reporting Regulations come into force in April 2017 (see our previous blog here). Although businesses who are caught by the regulations have 12 months to submit their first report, the date on which employers must take a first snapshot of their hourly rates of pay for men and women will either be 31 March 2017 (for public sector employers) or 5 April 2017 (for private and voluntary sector employers). Businesses should analyse their figures now so as to provide more meaningful reports when the time comes.
    • April 2017 also sees the advent of the Immigration Skills Charge, a fee brought in the Home Office for Tier 2 licensed sponsors payable per individual for the duration of their certificate of sponsorship. The amount of the charge is £1,000 per individual for each complete year of employment with a discounted rate for small employers of £364 per individual per year. Certain individuals will be exempt from the charge. For more information please contact Alex Christen
  • A new Code of Practice governing ethical employment in the Welsh public sector has been issued. The Code sets action points that attempt to tackle illegal and unfair employment practices in the public, private and third sector organisations.

    The code has been developed following evidence which illustrates that unethical practices are still taking place in supply chains throughout Wales, and further afield.

    Any organisation that receives funding from the Welsh Government will be required to sign up to the code and to comply with it. Those who are not obliged to follow the code will be encouraged to do so to ensure employment practices are being undertaken fairly and ethically.

    A copy of the code can be found here

  • The dispute over whether commission should be included in the calculation of holiday pay has continued to rumble on for some time. However, the Supreme Court appears to have finally put the issue to bed.

    Following the Court of Appeal’s decision that commission should be included in the calculation of Mr Lock’s holiday pay, British Gas applied to appeal to the Supreme Court. However, permission to appeal has been refused and the matter will not be heard by the Supreme Court. Employers should therefore include commission in holiday pay calculations going forward if they are not already doing so.

    For more information on the British Gas v Lock [2016] case, please refer to our previous article which explores this case in more detail here.