Major developments in employment law are expected to take place in 2017, Katee Dias outlines the main changes.
Employment Tribunal Fees
Fees were introduced in 2013 for all Employment Tribunal claims. However, the lawfulness of this was questioned and the latest hearing in the long running legal challenge by UNISON is expected to be heard in March 2017. Will fees be abolished?
For employers that have an annual wage bill of over £3million, a new 0.5% levy will be payable from April 2017. These additional funds are intended to be used by the government to contribute to the costs of apprenticeship training. Employers can claim back the levy they have paid if they use it for training apprentices. There are even some additional monetary government top-ups too – an additional 10p paid by the government on every £1 paid by the employer. If you are hit by the new levy, consider whether apprentices can be used in your business so that you can recoup some of this additional cost. Bricklaying, plumbing and plastering are perhaps some of the traditional areas where apprenticeships are readily thought about but apprenticeships can relate to many other roles, like chartered surveyor, facilities manager and property management.
From 1 April 2017, the minimum wage rates will increase. For those aged 25 and over, they will need to be paid a minimum of £7.50 per hour (from £7.20). This is known as the "national living wage". For those aged 21 to 24 (inclusive), the national minimum wage will be £7.05 per hour (up from £6.95) and for those aged 18 to 20 (inclusive), it will increase from £5.55 to £5.60 per hour. For younger workers, being 16 and 17 years olds, it will be £4.05 per hour (from £4.00) and for apprentices, £3.50 (up from £3.40). Remember that employers may be "named and shamed" for underpaying.
Gender Pay Gap Reporting
New legislation concerning gender pay data is expected to come into force in April 2017. Essentially, employers will be required to report on the difference between male and female pay levels (including bonuses) in their businesses. Only those with 250 or more employees will be compelled to do this, with the first report due by April 2018.
Currently many employers offer salary sacrifice arrangements as these are generally tax-efficient. However, from April 2017, tax relief will be phased out and in the long run will only continue in respect of a limited number of schemes, such as pension contributions to registered pension schemes, childcare benefits and equipment under the cycle to work scheme.
Following the high profile case involving Uber drivers, some individuals previously considered "self-employed" now have to be re-categorised as "workers". This is an important distinction as it means that they benefit from things like holiday rights and minimum wage entitlements. Despite the judgment being appealed by Uber, HMRC is apparently making a determined effort to investigate employment status issues (because the tax treatment is different for the self-employed and workers) so do consider carefully the true legal status of any arrangements that you have in place – is that bookkeeper of yours genuinely self-employed?
Mothers and their partners can share parental leave and pay under current legislation to care for their child. The government has confirmed that it plans to extend this right to shared leave and pay to include working grandparents too. This is expected to be implemented by 2018 so details should emerge this year. Given the relatively small uptake of men taking family leave, it will be interesting to see whether this right proves more popular with grandparents.
No corporate directors
Presently, a director of a company can be another company. However, there are plans to change this so that only individuals can be a board director. This change was expected to be brought in during October 2016 but that did not happen so it is presumably imminent. Companies will want to check their corporate structures to ensure they do not need to make any new appointments as a result of this expected change.
Reporting negligent health and safety practices on construction sites or property transactions that are rigged to defraud HMRC of tax are just some of the things that employees may blow the whistle about. The code of practice for employers on whistleblowing is currently being reviewed by the Department for Business, Energy and Industrial Strategy ("BEIS", previously known as BIS). It is expected that a revised code will be published during 2017.
Despite recent constitutional rulings, the government has committed to uphold the result of the referendum so at some point in the future we seem set to leave the European Union. How, when and what effect this will have on employment law remains to be seen but certainly it is an area to keep an eye on. Radical reforms early on seem very unlikely but there could perhaps be some tinkering around the edges, especially in view of some unpopular European case law decisions.
Employment law continues to move fast as the business and political worlds change over time. Hopefully the above serves as a useful foundation for some of the key things to look out for during this coming year.
This article first appeared in Estates Gazette magazine.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.