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Update on all things Employment and Brexit

25/07/2018

The fast paced world of employment law is always changing and, with Brexit looming, it’s an uncertain time for employers.

Employment Partner Julia Fitzsimmons looks at the new laws on the horizon and how could they impact on your business:

Brexit

The Government White Paper published on July 12 2018 gave some clarity about what will happen when we bid our final farewells to the EU in March 2019.

It said that no EU employment laws will be repealed meaning that unpopular laws such as TUPE, Working Time Regulations, collective consultation requirements and much of our discrimination legislation are here to stay.

For businesses using migrant workers, Brexit has also meant consideration of EEA workers in the labour market. The Migration Advisory Committee published its interim proposals looking at numerical limits on visas, minimum salary threshold for lower skilled roles and giving preferential treatment to those aged between 18 and 30. This may impact on local businesses particularly in the agricultural industry that rely on EU migrants for their workforce.

Worker Status

The Taylor Review was the Government's response to the investigation on the gig economy and worker status published in February. This has been high-profile and leading to a number of cases such as Pimlico Plumbers, Uber, and Deliveroo. The status of individual workers, particularly those ostensibly nominated as self-employed contractors, who are in fact workers with rights to holiday pay, in particular may well impact on businesses who use the flexibility of staff believed to be non-employed contractors to service fluctuations in workload.

On holiday pay and worker status, the case of King v Sash Window Workshop continues to give employers uncertainty.

The ECJ found that a worker was entitled to be paid on termination for any periods of annual leave that had accrued during employment, where that individual worker had been discouraged from taking leave because both parties believed it would have been unpaid. 

He was found to be a worker and not self-employed and therefore entitled to holiday pay. But the ECJ ruled there was no limit to the amount of leave that could be carried over in this type of case – and this worker had leave going back 13 years – and an employer who does not allow workers to take paid leave must bear the consequences.  

Allied with the confusion over worker status this case could be extremely costly for some employers who have wrongly badged an individual as self-employed when they are, in fact, workers. The Court of Appeal will hear the matter in November 2018.

Discrimination

Sex discrimination – government published its report on dress code May 2018.  The guidance was brief and did not really take the position any further following high-profile cases about women being required to wear high heels in the workplace.  

It forms part of the Government's broader commitments to address sex discrimination in the workplace looking at greater diversity on boards – although it has said it intends to take an non-legislative approach to improving board diversity.

Corporate

Allied to that, gender pay gap reporting came into force April 6 2017 under the Gender Pay Gap Regulations 2017. Companies with more than 250 employees must now publish six separate pieces of information annually including the overall gender pay gap i.e. the difference between male and female’s average hourly pay. The prescribed information needs to be uploaded to the employers website and retained there for at least three years and uploaded to the designated Government website.

In addition, the draft Companies Miscellaneous Reporting Regulations 2018 published on 11 June 2018 require directors of a company with 250 or more UK employees to report on the extent of employee engagement with large companies to provide a statement of their corporate governance arrangements and for some to publish as part of the directors remuneration report the ratio of their CEOs total remuneration comparing CEO remuneration to average pay in the wider company workforce.

In the pipeline

On the discrimination front, the possible introduction of discrimination on the grounds of caste, the Gender Recognition Act 2004 is to be amended to make changing gender legally an easier process.

Grandparental leave is still on the table although it is not known if this will be taken forward given the Government’s schedule.

Tax on Termination payment - with employment tribunal payments fees now removed, employment tribunals are deluged with claims and struggling to cope. 

Although there is a large scale recruitment process underway for employment judges, waiting times for hearings are extensive. A number of employers are looking to settle ET claims using Settlement Agreements. 

However the regime for taxing termination payments has been changed in two stages. All payments in lieu of notice have been taxable since April 6 2018. From April 6 2019 any termination payment over £30,000 will be subject to NIC contributions as well as tax, making it more expensive for employers to try and resolve matters by means of Settlement Agreements prior to Employment Tribunal hearings.

For more information, contact Julia on 01952 208420 or j.fitzsimmons@fbcmb.co.uk

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