Forthcoming legislation

New statutes and amendments

Last Modified  29 September 2016

Trade Union Act 2016
The Trade Union Bill became the Trade Union Act on 4 May 2016 and will be implemented in stages beginning in 2016. One of the government's aims behind the legislation is to ensure that strike action "only ever takes place on the basis of clear and representative mandates."

A number of amendments were made to the legislation during the Parliamentary process and provisions in the final statute now include:
  • a minimum 50 per cent turnout in a strike ballot of those eligible to vote (previous laws did not specify a participation rate). There is no change to the existing requirement that a majority of those voting must be in favour of taking action for a strike to be lawful
  • an additional threshold for essential services workers (those working in health, education, fire, transport, border security and nuclear decommissioning). For industrial action to be legal in these sectors, 40 per cent of those eligible to vote must support it
  • a requirement for more detailed ballot papers, including what the dispute is about, the type of action planned, and an indication of how long the action will last
  • a 14-day notice period for employers of planned industrial action (in previous legislation the notice period was seven days)
  • a mandate to strike will last six months, or up to nine months with employer agreement (the Bill suggested mandates should only last four months)
  • a requirement for pickets to have picketing supervisors (this gives legal force to a provision in the Code of Practice on picketing).
The government intended that the legislation would lift the ban on hiring agency staff during strike action, but this measure does not appear in the final version of the Act. There was also an intention to end 'check-off' arrangements (which allow for union subs to be deducted from wages), but rule changes on this will now be restricted to the public sector and will not come in until 2017.

For more information, go to 'Industrial action - in-depth'.
Gender pay gap reporting
Reporting on gender pay gaps is to become compulsory for private sector and voluntary organisations employing 250 or more people under the Small Business, Enterprise and Employment Act 2015 (the measure enacts Section 78 of the Equality Act 2010).

The government issued a consultation last year on ‘Closing the gender pay gap’ and in February 2016 issued a second consultation, Mandatory gender pay gap reporting, which contained draft regulations. These were expected to come into force in October 2016, but the Government Equality Office has indicated the enforcement date will now be April 2017.

Employers will need to calculate their gender pay gap by looking at mean and median figures for pay among men and women. 'Pay' includes holiday pay, maternity pay, shift premiums and so on, and bonuses. The first reports must be published before 30 April 2018 and will focus on the gap as at 30 April 2017. Annual reporting will be required thereafter by 30 April.

The rules are to be rolled out to large employers (250 employees or more) in the public sector by the end of 2016, with a planned commencement date of April 2017, and a requirement to publish the first reports before April 2018, as in the private and voluntary sectors. The government issued a consultation on how the new rules will work in August 2016. The regulations will only apply to public sector bodies in England, as control of authorities in Wales and Scotland is devolved.
Immigration Act 2016
The following provisions in the Immigration Act came into force on 12 July 2016:
  • extension of the existing criminal offence of an employer ‘knowingly’ employing an illegal migrant to having ‘reasonable cause to believe’ an employee is an illegal worker (this is likely to increase the number of prosecutions of employers as it lowers the burden of proof required)
  • creation of a new offence of illegal working (illegal workers could face a six-month prison sentence and have their assets seized under the Proceeds of Crime Act 2002)
  • extension of the prison sentence for knowingly employing an illegal worker from two to five years
  • creation of a new role of Director of Labour Market Enforcement to co-ordinate how worker exploitation laws are enforced by the Gangmasters Licensing Authority, the Employment Agency Standards Inspectorate and HMRC.
Other measures in the Act include:
  • a new power for immigration enforcement officers to close down a business employing illegal workers for 48 hours
  • a power to introduce an 'immigration skills charge' on employers sponsoring workers from outside Europe (initially the charge will be £1,000 for each skilled worker under Tier 2)
  • a new requirement for public sector workers in customer-facing roles to speak fluent English (a Code of Practice will set out how fluency will be assessed).
National living wage and NMW
A new mandatory 'National living wage' (NLW) was introduced on 6 April 2016 for workers aged 25 and over. Currently set at £7.20 (the previous over-21 national minimum wage rate of £6.70 plus a premium of 50p), the NLW will run alongside the other national minimum wage (NMW) rates and both the NMW and the NLW rates will increase from April in 2017 (the NMW has previously been amended in October each year). Note that new NMW rates apply from 1 October 2016 (see Statutory rates).

The government expects the living wage rate to rise to over £9 by 2020. The Low Pay Commission, which advises the government on the NMW rate, will also recommend appropriate levels for the NLW. A policy paper explaining the National Living Wage with information on the rates is available on the Gov.uk website.

On 1 April 2016 the penalty for employers paying below the minimum wage increased from 100 per cent to 200 per cent of the arrears owed to the workers if the debt is not cleared within 14 days. The penalty is capped at £20,000 per worker.
Public sector exit payment cap and claw back
In May 2016 the government confirmed that draft regulations (pdf) capping public sector exit payments at £95,000 will not come into force before 1 October 2016.

The cap will apply to lump sums (including redundancy payments), the cost to the employer of funding early access to unreduced pensions, and other non-financial benefits such as additional paid leave. They won't apply to pay in lieu of holidays, bonuses, or payments following a Tupe transfer.

There are also separate proposals to 'claw back' termination payments to public sector executives returning to the same area of work within 12 months. The measure is in the Small Business, Enterprise and Employment Act 2016 and the details are also in the draft exit payment regulations. The claw-back provisions were due to be in force by 1 April 2016, but have been delayed and there is no fixed date as yet for their implementation.
Tax on termination payments
A further consultation on changes to the tax rules on termination payments was published in August 2016 together with draft legislation.

From April 2018, all payments in lieu of notice (PILONs) will be subject to tax and national insurance contributions (NICs), regardless of whether there is a contractual right to make the payment or not.

The tax exemption for payments up to £30,000 made in connection with termination of employment (such as redundancy) will remain in place, but payments above that amount will be subject to both income tax and employer NICs.
Tribunal enforcement penalties
The Small Business, Enterprise and Employment Act 2015, which came into force on 6 April 2016, allows the government to impose a financial penalty (payable to the state, rather than claimants) on employers that fail to pay compensation awarded by tribunals or sums agreed under an Acas settlement agreement. The fine will be 50 per cent of the outstanding award, subject to a cap of £5,000. This section of the legislation needs a commencement order to bring it into effect.
Apprenticeships
There is to be levy on large employers (organisations with pay bills over £3 million, estimated to be less than 2 per cent of all UK employers) to fund 3 million additional apprenticeships over the next five years. The rate for the levy will be 0.5 per cent of an employer’s pay bill and each employer will receive an allowance of £15,000 to offset against their levy payment.

Legislation covering the levy is due to take effect in April 2017.
Grandparents and childcare
Detailed proposals and a consultation on the extension of shared parental leave and pay to working grandparents was scheduled for May 2016, but did not materialise. The policy, put forward by the previous Conservative administration, was aimed at supporting the costs of childcare during the first year of a child’s life and was intended to take effect by 2018.
Free childcare
The government is planning to double the number of hours of free childcare for 3 and 4-year olds in working families from the current 15 hours to 30 hours from September 2017. Pilot programmes in some areas will offer 30 hours of free childcare from September 2016.
Sunday trading
Government plans to devolve decisions on Sunday opening hours for larger stores to local authorities have been dropped (provisions introducing the change in the Enterprise Bill, which became law on 4 May 2016, were defeated in Parliament). However, a new provision will require shop workers in larger shops to give employers only one month’s notice of opting out of Sunday working, instead of the three months currently needed. Shop workers also gain a new right to object to working additional hours beyond their normal Sunday working hours.
Pensions auto-enrolment
Auto enrolment to pension schemes continues to be rolled out. Organisations come within the scope of the legislation by size, according to the number of employees they have on PAYE (see 'What's my staging date?' on the Pensions Regulator's website). Remaining compliance dates are:

Number of employeesDate
> 501 June 2015 1 April 2017
New business from 1 April 20121 May 2017 1 February 2018
Further information
Legal timetables, prepared by the CIPD, and available to members, cover developments in UK employment law since January 2014, including Acts of Parliament, statutory instruments, codes of practice and proposed legislation.