Employment law update Wednesday 2 nd May Newcastle | Leeds | - - PowerPoint PPT Presentation

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Employment law update

Wednesday 2nd May

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Housekeeping

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Agenda

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Employment status CCTV and GDPR Family Friendly Rights In Brief

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Employment Status

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Gig economy / self-employment » 4.77 million self-employed people in January 2018 (14.8% of all people in work) compared to in 3.8 million in 2008. » Approximately 1.3 million people (4% of all in employment) working in the gig economy. » Gig economy will cost Treasury an estimated £3.5bn in 2020/21. » Recent case law extending the scope of employment rights and their enforcement.

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Why does it matter

Employee Worker Self employed

Unfair dismissal National Minimum Wage Protection for health and safety on client's premises Maternity / paternity / adoption / shared parental leave Paid annual leave Normally protected from most forms of discrimination Redundancy pay Protection from all forms of discrimination, including part-time or fixed-term status Normally protected from suffering 'whistleblower' detriment Statutory notice periods Rest breaks Written statement of employment and pay slips Right to request flexible working

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Employment status – definitions under the Employment Rights Act 1996 » An "employee" is defined as an individual "who has entered into or works under a contract of employment". » A "contract of employment" is defined as "a contract of service or apprenticeship, whether express or implied, and (if it is express) whether

• ral or in writing".

» A "worker" is defined as an individual "who has entered into or works under: (a) a contract of employment; or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or personally perform any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual".

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Recent 'worker status' cases » Uber » Addison Lee » Deliveroo » CitySprint » Pimlico Plumbers » Anderson v Hampshire County Council

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Case Study - Pimlico Plumbers

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Employment status – key implications of getting it wrong » National Minimum Wage/National Living Wage » Long enforcement period and significant penalties » 'Name and shame' campaign » Holiday pay » Potential value of claims in light of the King v Sash Windows case » PAYE

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The Taylor Review - Suggestions » Renaming "workers" as "dependent contractors", with a clearer definition and additional employment law rights » Aligning employment status for employment and tax purposes » Introducing a higher rate of minimum wage for those without guaranteed working hours » Giving zero-hours workers the statutory right to request a guaranteed hours contract after 12 months » Placing burden on employers in employment status Tribunal claims » Allowing 'rolled-up' holiday pay with enforcement carried out by HMRC

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The Taylor Review - Actions » Government responded by launching 4 consultations: »Employment status »Agency workers »Enforcement of employment rights »Measures to increase transparency in the UK labour market

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Consultancy Agreements and IR35 » 'Personal service companies' are often used in Consultancy Agreements » Government estimates only 1 in 10 PSCs are genuinely self-employed » IR35 'off-payroll working' regime introduced to public sector in April 2017 with 'deemed employment' obligations » Potential introduction into the private sector? » Importance of contractual terms and practical arrangements

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Reforms to Tax and NICs treatment of termination payments

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Reforms to Tax and NICs treatment of termination payments » New tax rules apply where both payment and termination occur on or after 6 April 2018: » All PILONs will be treated as earnings and therefore subject to deductions for income tax and NI contributions; » Employers NI contributions (but not employee NI) will be payable on any part of a compensation payment that is taxable from 6 April 2019; » The £30,000 tax exemption will remain.

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Reforms to Tax and NICs treatment of termination payments » AFFECT: » Fairness and clarity to the taxation of termination payments by making it clear that all PILONs are taxable earnings. » This means the tax and NICs consequences are the same for everyone and are no longer dependent on how the employment contract is drafted.

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GDPR – 25 May 2018

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General Data Protection Regulation » GDPR will come into force on 25 May 2018 » The GDPR sets out a number of principles with which data controllers must comply when processing personal data: » Lawfulness, fairness and transparency » Purpose limitation » Data minimisation » Accuracy » Storage limitation » Integrity and confidentiality » Accountability

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What HR should have in place by 25 May 2018

19 19 Data Minimisation Data Accuracy Data Security Retention Periods Breach Reporting DPO/DPM Details SAR Right to object to processing Data Protection Policy.

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What HR should have in place by 25 May 2018

20 20 Each one is standalone and dependent on processing involved could require multiple records. Fair Processing Notice Processing Record Data Protection Impact Assessment Data Breach Log Standalone.

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GDPR Principles

» As the ER you must comply with the 6 GDPR principles when processing EE personal data.

Same position < DPA 1998 Stricter obligations New Principle

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General Data Protection Regulation » Fines are huge – up to 20,000,000 euros or 4% of annual global turnover » SAR - £10 fee abolished » SAR - 40 day deadline abolished. Compliance must be "without undue delay" and within one month » New – the right to be forgotten » New – self-reporting when GDPR has been breached. Must be done within 72 hours of becoming aware of the breach

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Families

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Shared Parental Leave » Introduced by the UK government in April 2015. » Only 8,700 parents took advantage of Shared Parental Leave between April 2016 – March 2017. » By contrast, 661,000 mothers and 221,000 fathers took maternity and paternity leave over the same period. » The government estimated last year that 285,000 working couples were eligible and it predicted that between 2 per cent and 8 per cent would take part in the scheme.

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Enhancing shared parental pay » Direct sex discrimination cases brought by male employees in Hextall v Chief Constable of Leicestershire Police and subsequently Capita Customer Management Ltd v Ali » Contrasting ET decisions left the law in an uncertain position » EAT decision this month has clarified that a direct sex discrimination claim can't be brought where an employer applies the same policy on enhancing shared parental pay to men and women » Possibility of indirect discrimination claim?

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Parental Bereavement Bill » There is currently no specific parental entitlement to time off work (paid or

• therwise) following the death of a child, although other types of statutory

leave may apply » Government is proposing to introduce a statutory right to 2 weeks' paid leave for employees who lose a child under the age of 18, subject to having 26 weeks' continuous employment » Government consultation open until June 2018 regarding the eligibility criteria, notice and eligibility requirements and leave patterns.

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Childcare voucher scheme » Deadline for new entrants extended to 4 October 2018 » Existing schemes unaffected until parents leaves current employer or employer closes scheme » Tax-free childcare scheme brought came into force April 2017

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In Brief

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In brief – Employment Tribunal Claims » ET fees abolished 26 July 2017 » Ministry of Justice published the provisional tribunal statistics for October to December 2017 » Single ET Claims up 90%

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Employment Tribunal Fees » Prior to the decision, employment fees were as follows:

Type of Claim Fee unpaid wages redundancy pay holiday pay notice pay equal pay £160 plus an additional £230 for a hearing fee. unfair dismissal discrimination whistleblowing £250 plus £950 for the hearing. 30 30

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Rates and increases

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• From 1 April 2018:
• statutory maternity, paternity, adoption and shared parental pay will

be £145.18 a week (up from £140.98).

• NMW: increase of 4.4% to £7.83 per hour (up from £7.50) benefitting
• ver 2 million workers. A full-time minimum wage worker will earn

more than £2,000 since the introduction of the National Living Wage in April 2016.

• From 6 April 2018:
• weekly rate of statutory sick pay will be £92.05 (up from £89.35).

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In brief – Vento awards for injury to feelings » Bands for damages for injury to feelings for claims presented after 6 April 2018 are:

32 32 Previous limits New limits Lower band £800 to £8,400 £900 to £8,600 Middle band £8,400 to £25,200 £8,600 to £25,700 Upper band £25,200 to £42,000 £25,700 to £42,900 Exceptional circumstances Over £42,000 Over £42,900

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In brief – basic and compensatory awards » A week’s pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal has increased from £489 to £508. » The maximum basic award for unfair dismissal has increased from £14,670 to £15,240; and the maximum compensatory award for unfair dismissal from £80,541 to £83,682.

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Gender Pay Gap » What is it? » The gender pay gap is the percentage difference between average hourly earnings for men and women » Employers with more than 250 employees are required to publish their gender pay gap » Across the UK, men earned 18.4% more than women in April 2017 » It was reported in April 2018 that more than 10,000 large firms have provided details of their gender pay gap, with three-quarters of them paying men more than women. » Although sectors vary enormously, no sector pays women more

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Gender Pay Gap » What does this mean? » Men are over represented in higher paid jobs and men are receiving larger bonuses than women » Finance sector has the biggest bonus gap paying women 35% less than men on average » Ryanair revealed a 71.8% pay gap » 8 of 554 highly paid pilots are women and more than two thirds of lower paid cabin crew are female

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Gender Pay Gap » 1,557 employers still not submitted their data……. » Tackling the gap?

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Any questions?

Gillian Chinhengo Associate | Employment

gillian.chinhengo@wardhadaway.com 0191 204 4297

Tom Shears Solicitor | Employment

tom.shears@wardhadaway.com 0191 204 4368

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