What to look out for in 2017
The number of people in agency work has increased by 30% since 2011 and is expected to continue to grow.
Employment status was a hot topic in the news in 2016 and is likely to continue to make headlines throughout 2017. Whilst there are notable benefits in using agency workers, there are concerns that it leaves people in vulnerable employment positions.
In December 2016 a review into modern working practices was launched which will consider the growth of agency workers and the associated risks from a business and individual perspective.
Many commentators have said it is likely that the Agency Worker Regulations 2010 will be repealed following Brexit which will no doubt be welcomed by many employment businesses.
The growth of less stable employment status has been considered in the context of part-time workers in further depth by David Sheppard
Brexit will continue to dominate the employment law landscape generating a wealth of uncertainty. The Supreme Court has confirmed that an Act of Parliament is required in order to serve notice under Article 50 and start the 2 year countdown to Britain’s exit from the EU. What does this mean in practice? We will certainly leave the EU; all political parties accept that this is the will of the people and cannot be tampered with. The issue will be the extent to which Parliament can lay down ground rules for the terms of that exit.
Employment status and whether someone is an employee, a worker or self-employed has engulfed the news during 2016 and it doesn’t seem to be easing up in 2017. Various claims made against Uber and similar companies such as Deliveroo rumble on.
A recent case has held that a cycle courier for Citysprint is deemed to be a worker, as opposed to being in business on her own account as Citysprint had insisted.
Citysprint petitioned that the cyclists were self-employed on the basis that they were presented with a “Communication of Tender to Supply Courier Services” which purported to treat them as self-employed. The Tribunal however held that the document did not reflect the true relationship between the parties and the reality of the working arrangement.
The tribunal concluded that the cyclist was actually a worker given that she wore a uniform, was required to work when she said she would and was directed by a controller. Perhaps more notably, Citysprint did not require her to submit invoices through a self-billing invoice system. Instead Citysprint automatically calculated payments due and paid them to the cyclist in weekly arrears after deductions.
The case of R (Unison) v Lord Chancellor is now due to be heard by the Supreme Court in March 2017, following a failed attempt in the Court of Appeal to remove Employment Tribunal fees.
Unison has argued that the fees prevent claimants from having access to justice and that the regime indirectly discriminates against certain groups.
The challenge has thus far failed due to a lack of evidence on the impact fees have on individual claimants. Despite this, the Court of Appeal recognised the dramatic decline in the volume of claims being brought in Employment Tribunals which has coincided with the introduction of the fees.
Unison also argue that the Lord Chancellor has failed to have due regard to his public duty to eliminate discrimination and advance equality of opportunity. We will as ever keep you updated.
January has seen a blast of industrial action with Southern Rail, London Underground and British Airways Cabin Crew in the news.
Perhaps quite timely, 2017 will see a change in relation to the law on strike action through the implementation of the Trade Union Act 2016, due in force in in March 2017.
Most notably the Act 2016 will introduce a new requirement for industrial action to have a minimum 50% turnout from eligible voters as well as requiring a 40% vote in favour of the strike where it will affect “important public services” namely health, fire, transport, education and border security.
Capital Law’s employment law Partner Richard Thomas, talks strikes and industrial action in response to the New Year strike by Southern Rail in the following article.
There were several changes announced in the Autumn, most notably:
Increases to the National Living and National Minimum Wage
From 1 April 2017, minimum and living wages will increase view here
Furthermore, the Government intend to invest 4.3 million each year to strengthen the enforcement around the national living wage to ensure employers are paying their employees correctly and fairly. HMRC recently released the top 10 worst excuses it received for not paying workers the correct minimum wage. Excuses include:
- “She doesn’t deserve the national minimum wage because she only makes the teas and sweeps the floors”
- “my employee is still learning so they aren’t entitled to the national minimum wage”
- “my workers like to think of themselves as being self-employed and the national minimum wage doesn’t apply to people who work for themselves”.
Clearly there is no excuse not to pay employees at least the relevant minimum wage and the Government is committed to taking a hard line in enforcing minimum rates of pay.
From April 2018, changes to the taxation of termination payments are expected to come into force as follows:
- All payments made in respect of notice will be taxable regardless of whether there is a payment in lieu of notice clause in the contract.
- Any payments above the £30,000 threshold will be subject to employer’s national insurance contributions.
- Foreign service relief will be abolished (however payments will only be taxable if there is a territorial connection with the UK).
- Ensure all payments for injury to feelings fall outside the exemption for injury payments (except for psychiatric illness or other recognised medical conditions).
- Allow HMRC to vary the £30,000 threshold.
Many employers and employees will be affected by the changes to salary sacrifice schemes which will restrict schemes to certain benefits from April 2017.
These include employer contributions to pension schemes, childcare benefits, cyclist’s safety equipment through the cycle to work scheme and ultra-low emission cars. This essentially means that there will be no further salary sacrifice schemes in relation to any other benefits employees have received in the past.
Any existing arrangements will be protected until April 2018 or in some cases until April 2021 for cars, accommodation and school fees.
Employers should consider the contractual arrangements they have with their employees in relation to these schemes and whether any action is required prior to the protection ending in 2018.
Employee shareholder status (“ESS”)
Introduced in 2013, the ESS scheme intended to give employees income tax, capital gains tax and national insurance contribution relief in relation to shares which employees have acquired in return for giving up certain employment rights.
Despite low take up on the scheme, it did provide advantages to employees in relation to tax benefits.
Following the Autumn statement the scheme will be closed to new entrants. The ESS scheme will be honoured for employees who entered into the scheme before December 2016. Therefore, the tax relief applying to shares associated with arrangements entered into before 1 December 2016 will continue to be honoured.