New statutes and amendments
Statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory shared parental pay (ShPP) rose to £140.98 a week on 2 April 2017.
Limits on employment tribunal compensation rates increased on 6 April 2017. The limit on a week’s pay (used for calculating redundancy and the basic award for unfair dismissal) rose from £479 to £489, and the cap on the maximum compensatory award for unfair dismissal rose from £78,962 to £80, 541.
Following a long-awaited review of the effect of the introduction of tribunal fees in 2013, the Ministry of Justice has proposed raising the gross monthly income threshold for fee remissions 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).
The National Living Wage (NLW) increased on 1 April 2017 from £7.20 to £7.50 for workers aged 25 and over. At the same time the National Minimum Wage rate for 21 to 24 year old workers rose to £7.05 an hour, the rate for 18 to 20 year olds increased to £5.60 an hour, and the rate for 16 and 17 year olds went up to £4.05 an hour. The minimum hourly rate for apprentices is now £3.50 an hour.
A review of modern employment practices
commissioned by the government and led by Matthew Taylor, chief executive of the Royal Society of Arts, is due to report in June. 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 Business, Energy and Industrial Strategy parliamentary committee has also published evidence collected during an enquiry it held in to the future world of work
and rights of workers.
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 closed on 17 February 2017, also considered 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.
A Parliamentary Select Committee
produced a report on 5 April 2017 calling for tighter controls on executive pay, greater accountability for remuneration committees, annual reporting of pay ratios, and a target of 50 per cent female appointments to executive management positions by 2020.
The Act became law on 4 May 2016 and came into force on 1 March 2017.
The Act requires that, for industrial action to be lawful, there must be:
- a 50 per cent turnout in a strike ballot of those eligible to vote in addition to a majority of those voting being in favour of taking action
- 40 per cent of those eligible to vote supporting the action in ‘important public services’ (see below) in addition to the 50 per cent participation threshold
- a detailed ballot paper, 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. There is also a requirement for pickets to be supervised (giving legal force to a provision in the Code of Practice on picketing).
The government’s intended ban on hiring agency staff during strike action did not make it in to the final version of the Act. There was also an intention to end 'check-off' arrangements (which allow 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.
Regulations were published on 6 December 2016, specifying which categories of public services workers were covered by the 40 per cent threshold requirement (see above). The services 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 (included in policy documents) have been omitted from these regulations, as the government wants more time to investigate the issues involved.
Reporting on gender pay gaps became compulsory for private sector and voluntary sector organisations employing 250 or more people, and for larger public bodies in England (control of authorities in Wales and Scotland is devolved) on the 6 April and 31 March 2017 respectively. The measure enacts Section 78 of the Equality Act 2010, and is contained in the Small Business, Enterprise and Employment Act 2015.
Under the private sector gender pay gap information regulations
, 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. (Note that these compliance dates are different to those published in the first draft of the regulations.)
The public sector gender pay gap reporting regulations
mirror those for the private sector, although 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.
The Equality and Human Rights Commission can take enforcement proceedings against employers failing to comply with the regulations, and it is likely to take the guidance into account when deciding whether to take action. Any reporting inaccuracies could lead to adverse inferences being taken against an employer in a discrimination tribunal claim.
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.
In April 2017, an immigration skills charge
of £1,000 a year (£364 for organisations with fewer than 250 employees) was introduced for Tier 2 (general) visas, along with an immigration health surcharge
(£200 per transferee) for Tier 2 (intra company transfers) visas. The health surcharge, introduced in 2015, already applies to a number of other immigration categories.
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 EU General Data Protection Regulation (GDPR), which applies to all member states from 25 May 2018, will also apply here, even though the UK is leaving the EU.
The regulations provide individuals with easier access to their own data, a ‘right to be forgotten’, and a right to know when their data has been hacked. There will be one set of rules applying across all EU member states, and one supervisory authority rather than the current individual authorities in each country. Organisations may need to appoint a data protection officer, and could face a fine equivalent to 4 per cent of their global turnover if they breach the rules. Exemptions apply for SMEs for whom data processing is not a core business activity.
The Information Commissioner's Office has produced a 12-step guide
to the new rules.
The government produced a response
to its consultation last year, containing draft regulations, on making “public sector exit terms fairer, more modern and more consistent” but has not yet brought those regulations in to force. It intends to introduce a £95,000 cap on all public sector exit payments and to ‘clawback’ redundancy payments to highly-paid employees who return to public sector jobs shortly after receiving a termination package.
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.
The IR35 tax rules governing off-payroll working in the public sector
changed on 6 April 2017. From this date, responsibility for deciding whether the rules apply shifts from the worker’s intermediary company to the public body, agency, or third party paying the intermediary, which will then be responsible for deducting relevant tax and NICs from the fee it pays to the intermediary organisation where appropriate.
Since 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) have been required to pay an apprenticeship levy. The sum is equivalent to 0.5 per cent of their total annual salaries and is intended to help fund additional an additional 3 million apprenticeships over the next five years. Employers paying the levy will receive an allowance of £15,000 to offset against their apprenticeship training costs.
All organisations meeting the salary threshold will be required to contribute, whether or not they have apprentices. The levy will go in to a digital apprenticeship account, which employers will be able to draw on for approved apprentice training. Employers will receive a government top-up of 10p for every £1 going into the account.
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.
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 employees||Date|
|> 50||1 June 2015 – 1 April 2017|
|New business from 1 April 2012||1 May 2017 – 1 February 2018|
HR-inform refers to the following statutes:
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.