Recent and upcoming developments in employment law

The summer may now have gone but it was an active period for employment law news. Below we look back at some of the happenings to ensure you remain aware of developments that could impact on your business going forward.

Employment status

It was reported in July 2016 that the food delivery firm, Deliveroo, had added restrictions in the contracts with their “self-employed” drivers in an attempt to avoid them arguing that they are either “employees” or “workers”.

This is because employees and workers have far more employment rights compared to self-employed individuals, such as the right to be paid at least the national minimum wage.

The restriction read “You further warrant that neither you nor anyone acting on your behalf will present any claim in the employment tribunal or any civil court in which it is contended that you are either an employee or a worker”.

Such a provision is unlikely to work in practice and will potentially upset employment relations so think twice before trying to place similar restrictions on your workforce.

Living wage

Debate has raged as to whether the introduction of the living wage back in April 2016 (namely a minimum rate of £7.20 per hour for those aged 25 or over) has meant that employers have reduced the number of staff they engage or the level of benefits offered to employees.

However, a survey in July 2016 by Resolution Foundation has suggested that the additional pay is either being passed on to customers in the form of increased prices or the employer is simply making less profit themselves.

Termination payments

Currently, an employer is able to make an ex-gratia payment of up to £30,000 on termination of an employee’s employment without deductions for tax or national insurance.

After that, income tax applies but not NI contributions.

It was announced in August 2016 that these rules will be revised with effect from April 2018 so both tax and employer’s NI will become payable.

This will make things more expensive for employers.

Gender pay gap reporting

New legislation on gender pay reporting was brought into force in August 2016, although the final parts of the new legislation are not expected until October.

It is understood that employers with

250 or more employees will become compelled to analyse gender pay gap data (being the difference in levels of pay between men and women at the same employer) and publish their results.

It is expected that the first analysis will be required as at 30 April 2017 and the first report will need to be published a year later.

However, savvy employers will want to consider their analysis early and take steps to ensure any pay gaps are equalised or can be explained, before they have to expose the data and run the risk of potential equal pay claims being brought by disgruntled employees.

Brexit

No new round up would be complete without a mention about Brexit.

We all await details on when and how Britain will exit Europe but certainly some changes to employment law are likely in the long term.

There has already been some speculation about changes being made to the rules on working time, the transfer of businesses (often known as TUPE transfers) and the rights of agency workers.

However, laws relating to discrimination and unfair dismissal are perhaps unlikely to be amended. No one knows what the future may hold but employers will want to keep an eye on developments in this area.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.  If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.