Forthcoming legislation

New statutes and amendments

Last Modified  02 February 2017

Review of employment practices
The government has launched an independent review of modern employment practices led by Matthew Taylor, chief executive of the Royal Society of Arts. Its aim is to find out whether the existing regulatory framework meets the needs of the increasing numbers of people working in the ‘gig economy’ and whose employment status is often ambiguous (they may be called ‘self-employed’, but increasingly tribunals are finding the nature of the relationship indicates they are ‘workers’ for employment protection purposes). The Department for Business, Energy and Industrial Strategy is also launching a research project in to the scale of the gig economy.
Corporate governance (employee voice)

The government published a green paper on corporate governance towards the end of last year asking for views on a range of options designed to improve the extent to which company stakeholder views, including those of employees, can influence board level decision-making in large private sector organisations. The consultation, which closes on 17 February 2017, also considers improving transparency on executive pay.

The proposals include:

  • Establishing stakeholder advisory panels for boards
  • Requiring non-executive directors to speak for stakeholders on boards
  • Appointing individual stakeholders, including employees, to boards
  • Extending reporting requirements to include companies' responses to stakeholder views.

The Ministry of Justice has produced its long-awaited report following its review of the effect of the introduction of tribunal fees in 2013, together with proposals for modest reforms. It suggests raising the gross monthly income threshold for fee remission from £1,085 to £1,250 (in line with those working full-time on the National Living Wage) and removing fees for claims related to the National Insurance Fund (typically redundancy payments from insolvent employers). A consultation on the reforms closes on 14 March 2017.

Trade Union Act 2016

The Trade Union Bill became the Trade Union Act on 4 May 2016 and will be implemented in stages.

The main provisions are:

  • a minimum 50 per cent turnout in a strike ballot of those eligible to vote in order to make industrial action lawful (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
  • an additional threshold for ‘important public services’ workers (see above). 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 (previous legislation specified 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. 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 some private sector employers carrying out public functions.

Trade Union Act 2016: important public services
Five sets of draft regulations were published on 6 December 2016, specifying the categories of ‘essential services workers’ (now called ‘important public services’) covered by the new ‘40 per cent threshold’ required for industrial action to be legal (see above). The services covered include:
  • Hospital services, such as A&E, intensive care, psychiatric and emergency midwifery services
  • Teachers of compulsory school-age children, and those working in further education
  • Fire-fighters, and fire and rescue service personnel organising a response to emergencies
  • London bus, national rail, and tramway personnel, including maintenance workers, and air traffic control, airport and port security services
  • Border control personnel, sea patrol and border intelligence officers.
Nuclear decommissioning services have been omitted from these regulations, as the government wants more time to investigate the issues involved.

The regulations are due to come into force on 1 March 2017 but there is no date yet for the enforcement of the new 40 per cent balloting threshold itself.
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 rules will also be rolled out to large employers (250 employees or more) in the public sector, but will apply only to public sector bodies in England, as control of authorities in Wales and Scotland is devolved.

The final version of the private sector gender pay gap information regulations has now been published and is due to come into force on 6 April 2017. Employers in scope will need to publish their first report by 4 April 2018, based on a ‘snapshot’ date of their pay gap on 5 April 2017. (These compliance dates are different to those published in the first version of the regulations.)

Draft regulations have also now been published for gender pay gap reporting in the public sector. These regulations, which are due to come into force on 31 March 2017, apply to public sector organisations with 250 employees or more, and mirror those for the private sector. However, the 'snapshot' date will be 31 March, and reports will have to be published by 30 March each year, in order to fit in with existing public sector reporting requirements.

Six sets of figures are required in the reports, including the percentage difference between male and female employees:

  • in mean hourly pay on the snapshot date
  • in median hourly pay on the snapshot date
  • in mean bonus in the previous 12 months
  • in median bonus in the previous 12 months.

Employers also have to report on the percentage of men and women who received a bonus in the previous year, and the percentage of men and women in each hourly pay rate quartile.

Acas has now produced guidance on managing gender pay reporting in the private and voluntary sectors. The Equality and Human Rights Commission can take enforcement proceedings against employers failing to comply with the regulations, and it is likely that it would take the guidance into account when deciding whether to take action. In addition, any reporting inaccuracies could lead to adverse inferences being taken against an employer in any subsequent discrimination tribunal claim.

Immigration Act 2016

Changes to Tier 2 under the UK’s visas and immigration rules came into effect on 24 November 2016:

  • Tier 2 (general) salary thresholds for experienced workers increased to £25,000
  • Tier 2 (intra-company transfer) salary threshold for short term staff rose to £30,000
  • Tier 2 (intra-company transfer) salary threshold for graduate trainees reduced to £23,000 and the number of places allocated per company rose to 20 a year
  • Tier 2 (intra-company transfer) skills transfer sub-category closed.

No date has yet been given for when the health surcharge will be introduced for intra company transfers.

The government has also published a code of practice on the new requirement under the Act for all public sector staff in public-facing roles to speak English (or Welsh) fluently enough for “the effective performance of their role” (language requirements already exist for doctors and teachers). The code came into force on 21 November.

National living wage and NMW

The government announced in its November 2016 autumn statement that the National Living Wage (NLW), currently set at £7.20 for workers aged 25 and over, will increase to £7.50 from April 2017. At the same time the National Minimum Wage rate for 21 to 24 year old workers will rise to £7.05 an hour, the rate for 18 to 20 year olds will increase to £5.60 an hour, and the rate for 16 and 17 year olds will go up to £4.05 an hour. The minimum hourly rate for apprentices will be £3.50 an hour.

Public sector exit payments

The government wishes to restrict public sector exit payments in order to bring them more into line with private sector practice. In a response to its consultation last year (which contained draft public sector exit payment regulations) the government said it will introduce an ‘overarching framework’ for workforce agreements in order to “cut the cost of redundancies, and to ensure greater consistency between schemes”.

The government still intends to introduce a £95,000 cap on all public sector exit payments and to ‘clawback’ redundancy payments to highly-paid employees returning to the public sector shortly after receiving a termination package.

Tax on termination payments

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.

Apprenticeship levy

From 6 April 2017, organisations with annual pay bills of more than £3 million (estimated to represent less than 2 per cent of all UK employers) will be required to pay a levy equivalent to 0.5 per cent of their total annual salaries to help fund additional apprenticeships over the next five years (the government is looking to increase the number of apprenticeships by 3 million). Each employer paying the levy will receive an allowance of £15,000 to offset against their apprenticeship levy costs.

All organisations meeting the salary threshold will be required to contribute, whether or not they have apprentices, but those that have apprenticeships will be able to put the amount owed in a digital apprenticeship service account and, potentially, claw back some of it for use in approved apprentice training. Employers will receive a government top-up of 10p for every £1 going into the account.

For more details, go to government guidance ‘Pay apprenticeship levy.’

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.

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
Recent and forthcoming legislation, prepared by the CIPD, and available to members, cover developments in UK employment law since January 2015, including Acts of Parliament, statutory instruments, codes of practice and proposed legislation.